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House of Lords

Wednesday, 1 December 2010.

3 pm

Prayers-read by the Lord Bishop of Newcastle.

House of Lords: Reform


3.06 pm

Asked by Lord Dubs

The Minister of State, Ministry of Justice (Lord McNally): My Lords, the new appointments since the general election are entirely consistent with the coalition's programme for government, which set the objective of creating a second Chamber that is reflective of the share of the vote secured by the political parties at the last general election. The Government are committed to reform of this House. The cross-party Joint Committee on House of Lords Reform will come forward with a draft Bill early in the new year.

Lord Dubs: My Lords, I want to make it clear that I mean no disrespect to the many Members who have recently joined this House or are about to do so, but how can the Minister reconcile the Government's reducing by 50 the number of MPs in the House of Commons with increasing by more than that the number of Members of this House? Is he not breaking the cross-party understanding that the Government should not have an overall majority, especially as this has an adverse effect on the Cross Benches? I have yet to find a single Member of this House who agrees with the Minister-and I have asked quite a few of them. One can look at the faces behind the Minister to see that they are nodding in agreement with me and not with him.

Lord McNally: I had better not look behind me then. There is a dilemma which this House has partially created for itself. For as long as I have been involved in these matters, there has been an assumption that incoming Governments will freshen their Benches, partly for reasons of needing to man the government Benches. That is exactly what the Labour Party did, with Mr Blair creating more than 300 Peers during his term of office. The attempts to reform this House over the past 10 years have failed and we are left with a problem of a House that is too large. That is why I hope that the Benches opposite, when they get the opportunity in January, will enthusiastically embrace the reform programme which the Government will put forward.

Lord Tyler: Does my noble friend agree that the best way to make progress would be if the Labour Party, instead of bringing in ex-MPs who are refuseniks

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on reform of your Lordships' House, stuck to its manifesto commitments, made not just at the last election but at many other elections, to reform this House comprehensively?

Lord McNally: My noble friend makes some valid points, but I think that it is unfair to say that the ex-MPs who come in are against Lords reform. It usually takes them two or three weeks before they become enthusiastic supporters of the House. I see in his place the noble Lord, Lord McAvoy, who has taken to the ermine like a duck to water.

Lord Hunt of Kings Heath: My Lords, the noble Lord, Lord McNally, has implied that the 300 Peers brought in by Mr Blair were Labour Peers, but can he tell me how many were not and took other Whips in the House? Does he endorse the remarks made yesterday by his noble friend Lord Tyler, who in the context of Lords reform effectively told the Cross Benches that, unless they supported the Government in votes, a 100 per cent elected House rather than an 80 per cent elected House would be proposed? Does he endorse that view?

Lord McNally: I do not read that into what my noble friend Lord Tyler said yesterday. I trust the Cross Benches to take decisions on votes in this House as individuals and not as a collective group. I know that they will continue to do that. Even more shaming than any threats real or imagined from my noble friend Lord Tyler are the blatant attempts made by the Labour Party to lure the Cross Benches into elephant traps when trying to delay government business.

Lord Kakkar: My Lords, have any of the newly appointed Peers been asked to give an undertaking that they would support House of Lords reform as envisaged by the Deputy Prime Minister?

Lord McNally: My Lords, it is always good to have a contribution from the Cross Benches. No such assurances have been asked for and they would be pretty valueless for the reason I gave earlier. I can see faces on the Benches opposite who I remember in their radical youth wanted to burn this place down, and they are now enthusiastic supporters of no change at all.

Lord Campbell of Alloway: Does the noble Lord accept that there is no logical explanation to the Question put by the noble Lord, Lord Dubs? We all know the views of the Cabinet and the coalition. I speak as a Conservative, I am still a Conservative and I support-when I can-the coalition, but not on this occasion.

Lord McNally: I am well aware of those views. All I will say to all sides of the House is that the other place has come to a settled and consistent view on the need to reform this Chamber. In keeping with our democracy, those views were taken to the electorate. The Conservative Party's commitment to reform, the Liberal Democrats' commitment to reform and the slightly dodgy, but still there, commitment of the Labour Party to reform-

A noble Lord: We lost-

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Lord McNally: We all lost, but some of us made a better fist of that fact than others.

Lord Pearson of Rannoch: My Lords, if it were true-

Baroness Gould of Potternewton: My Lords-

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, there is time for only one more question. Noble Lords cannot all stand up at the same time.

Lord Pearson of Rannoch: My Lords-

Lord Strathclyde: This is a question we will come back to many times. There is time for only one more question. The noble Lord, Lord Pearson, has been trying to get in consistently since the beginning and I suggest that we hear from him. There will be many other opportunities.

Lord Pearson of Rannoch: My Lords, if it is true that the Government are appointing new Peers in proportion to the votes cast at the general election, why does UKIP not have 24 Peers in your Lordships' House and why did the Prime Minister refuse a single extra Peer?

Lord McNally: My Lords, I do not know. It is not in my brief, but I will find out. That shows that you should never let in that last question.

Roads: Long and Heavy Vehicles


3.15 pm

Asked by Lord Dixon-Smith

Earl Attlee: My Lords, the Government have made it clear that they have no intention of permitting any trials of goods vehicles longer than 18.75 metres or heavier than 44 tonnes. The Government are awaiting the conclusions of research into a small increment in the length of articulated lorries, but this would provide no more loading capacity than is currently possible with a rigid draw-bar combination lorry.

Lord Dixon-Smith: My Lords, many types of lightweight freight are completely inappropriate for rail travel. At a time when all public expenditure is under critical examination, to improve productivity and to reduce costs, does my noble friend agree that it is appropriate to review all our regulatory systems at the same time, so that economic or environmental performance on this particular transport question can be improved wherever possible?

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Earl Attlee: My Lords, before responding to that question, I should first declare an interest as I know Mr Dick Denby, who is a proponent of a longer and heavier vehicle. I have also received engineering advice from his designer on a pro bono basis. Mr Denby has done the country a great service by opening up this issue. As a result, this Government and our predecessor have been looking at a small increase in the length of an articulated vehicle to address precisely the concern of my noble friend: that low-density goods are bulking out, rather than grossing out, our current range of goods vehicles.

Lord Snape: My Lords, does the Minister accept that it is the heaviest goods vehicles that directly abstract traffic from rail freight? Will he accept from me that, for years, the road haulage industry has been claiming spuriously that heavier and longer goods vehicles would mean fewer of them? Does he agree that the heaviest goods vehicles have, for over 30 years, failed to pay their true track costs, and does he accept that any acceptance of longer and heavier vehicles will cause even more damage to Britain's roads, which will be paid for by other taxpayers?

Earl Attlee: My Lords, most of what the noble Lord says is right. We are looking at an increase in the cubic capacity of an articulated vehicle, but we have absolutely no intention of increasing the gross weight of a goods vehicle, for precisely the reasons that the noble Lord explained.

Lord Geddes: My Lords, is the crucial question in this context not the axle weights rather than the overall weight?

Earl Attlee: My Lords, the noble Lord makes an important point. The damage to the road goes up in proportion to the fourth power of the axle weight, but we have no intention of altering the permitted axle weights either. However, the type of vehicle we are looking at will require different axle arrangements on the rear of the vehicle.

Lord Davies of Oldham: My Lords, I quite appreciate the Minister approaching this issue with some care, because he will know the anxieties of the general public about the questions over the damage which heavy lorries do to our roads and the pollution that they create. However, is there any reason why he should delay the charging of heavy goods vehicles, given that at present he is all too well aware of the unfairness of foreign lorries coming into this country and using our roads without cost?

Earl Attlee: My Lords, we discussed lorry road-user charging recently at Question Time. We are working on it and will announce on it in due course.

Lord Bradshaw: Can the Minister assure us that road safety will play a very prominent part in his consideration, because these lorries will not be confined to the motorway network? Will he please tell us, through the Library or however, how many prosecutions have been brought against HGVs-heavy goods vehicles-for contravening the weight restrictions on most of our roads?

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Earl Attlee: My Lords, the noble Lord raises important issues about enforcement. This question is more about the design, construction and use of our vehicles, but he is right that we need to make sure that we enforce regulations on the operation of goods vehicles very carefully indeed.

Lord Faulkner of Worcester: My Lords, can the Minister confirm that it is the policy of this Government to carry as many goods by rail as possible and to transfer goods from road to rail wherever possible? In that context, will the Government continue to support freight transfer depots and other facilities to enable goods to be put on to the railway and carried long distances by rail rather than by road?

Earl Attlee: My Lords, on the first part of the noble Lord's question, absolutely. We will do nothing that reduces the amount of freight carried by rail.

Viscount Montgomery of Alamein: Can the Minister confirm that the road axle weight has increased from 38 tonnes per axle? He rather gave that impression in his earlier Answer.

Earl Attlee: My Lords, the gross train weight-that is, the all-up weight of a heavy goods vehicle-was increased some time ago from 38 tonnes to 44 tonnes, but the axle weight is considerably lower than that.

Lord Craig of Radley: My Lords, will the Minister take into account the number of heavy goods vehicles that have jack-knifed during the recent bad weather and caused considerable traffic delays? Does this need to be borne in mind in deciding on the future of these arrangements?

Earl Attlee: My Lords, one of our motivations for considering a slightly longer articulated trailer rather than using a rigid vehicle towing a draw-bar trailer-precisely the point that the noble and gallant Lord makes-is that we believe that an articulated vehicle will be slightly safer.

IMF and World Bank: Appointment Procedures


3.21 pm

Asked by Lord Stern of Brentford

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, G20 leaders are committed to open, transparent and merit-based selection processes for the heads and senior leadership of all international financial institutions. The UK supports this commitment as part of a broader package of reforms to increase

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the institutions' effectiveness and legitimacy. Further consideration is being given to the processes for search, selection and appointment of heads at the IMF and the World Bank.

Lord Stern of Brentford: I thank the Minister for his Answer and I declare an interest as a former chief economist and senior vice-president of the World Bank.

Does the Minister agree with the assessment that the system of reservation-because that is what it is-of headships of the IMF and the World Bank for Europe and the United States respectively is outdated, unacceptable in the modern world and deeply resented by the Governments and people of developing countries? Does he also agree that past declarations of the importance of open competitions have not prevented the UK Government from participating in the continuation of these stitch-ups? Does he therefore agree that, to make the openness clear, the UK should support non-European and non-US candidates for these positions? There are many outstanding candidates. I am happy to provide him with a list. If the IMF position becomes available first, Europe must take the lead, as a matter of principle, whether or not the US tries to keep its monopoly at the World Bank.

Lord Sassoon: My Lords, I pay tribute to the noble Lord for the distinguished part that he played as chief economist at the World Bank and I therefore listen very carefully to what he has to say. I can confirm that this longstanding, informal agreement whereby the managing director of the IMF was always a European and the World Bank was always to be headed by a US citizen is well past its sell-by date. As I said, we support open and transparent appointments based on merit and in that context, while it is right and appropriate that good candidates from wherever should come forward, the UK's position is emphatically that appointments should be made regardless of nationality or, indeed, of gender.

Lord Bilimoria: My Lords, does the Minister agree that waiting for the appointment of the head of the World Bank is like waiting for white smoke to emerge from the building? We know that the Americans fund the World Bank more than anyone else, but, in spite of that, is it right that the President of the United States, behind closed doors, should have the right to appoint the head of the World Bank in today's world? With the IMF, why should it be a European? Why can it not be, as the noble Lord, Lord Stern, said, someone such as our mutual friend, Montek Singh Ahluwalia, the deputy head of the Planning Commission in India?

Lord Sassoon: My Lords, I will not repeat my previous answers but I draw attention to part of my first Answer. Processes for search, selection and appointment are being worked up by the IMF and the World Bank. I suggest that any candidates that noble Lords think are appropriate for the appointment should apply in due course.

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Baroness Kinnock of Holyhead: My Lords, is the Minister aware that European countries occupy eight to nine of the 24 seats in the IMF and the World Bank? Does he not consider that we, as one of those European countries, should presume that it is about time some of these privileges were given up in favour of emerging and developing countries?

Lord Sassoon: My Lords, I said at the outset that the improvements to the processes for appointing the heads of these organisations must be part of wider reform packages for the entire governance of the IMF and the World Bank. Progress is being made on that in the quota shares, the voting arrangements and the governance arrangements. Equally, it is critical that, under the new arrangements, the four BRIC countries are in the top 10 voting and quota share countries, so we will have a much better balance in both voting and representation. It is equally important that the UK remains a top five member and that we retain our board seat.

Lord Newby: My Lords, does the Minister accept that these top appointments are intensely political? Therefore, simply having a process that is called "open and transparent" will not guarantee that the best person gets the job. Would it not be sensible, as the noble Lord, Lord Stern, said, for the British Government to make it clear at this stage that they expect the next head of the IMF and the World Bank not to be a European or an American?

Lord Sassoon: I can only restate the position of the Government: these appointments should be made regardless of nationality or gender.

The Lord Bishop of Liverpool: My Lords, is the Minister aware that many of the beneficiaries of the World Bank feel that the leadership of both the World Bank and the IMF are out of touch with the complexity of the issues facing the developing world, especially when it comes to land rights?

Lord Sassoon: My Lords, I am grateful to the right reverend Prelate for reminding us of what part of the important role of the World Bank is. Indeed, since we are talking about governance arrangements, it is important that there is a commitment to arriving at a new formula for the World Bank shareholding by 2015 that will properly reflect the development mandate of that organisation.

Lord Grenfell: My Lords-

Lord McFall of Alcluith: My Lords-

Noble Lords: Order!

Lord Grenfell: I am most grateful to my noble friend for giving way. I declare an interest, having served 30 years with the World Bank and being in receipt of a pension from it. I totally agree with what the noble Lord, Lord Stern of Brentford, has said about the necessity of broadening the field of recruitment. Does the Minister agree that the most important aspect is to make sure that the best qualified person gets the job and that it is extremely important that, whatever negotiations are held, the G20 should not go from one stitch-up, which we have now, to another

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and thereby end up with the lowest common denominator of approval? We should at least find the best people available for both these posts.

Lord Sassoon: I am very grateful to the noble Lord, Lord Grenfell, who speaks from immense experience. I completely agree with what he said.

Lord McFall of Alcluith: Undemocratic and non-transparent are the buzzwords of these institutions today. Will the British Government take the lead from the German finance minister who asked for lower representation for European countries so that the sub-Saharan and developing countries can get more representation and so that we have a big step on the way to democracy for these institutions?

Lord Sassoon: The Government are pleased with the recent agreements in the IMF and the World Bank that have seen a significant shift of voting and quota away from the developed towards the dynamic, growing economies.

Immigration: Detention of Children


3.30 pm

Asked by Lord Foulkes of Cumnock

The Minister of State, Home Office (Baroness Neville-Jones): My Lords, there has been progress in the pilot studies that the Government have been conducting. We remain determined to end the detention of children for immigration purposes and intend to make a Statement on the subject before the Christmas Recess. As the House will be aware, the number of children in detention for immigration purposes has fallen dramatically-and is now very low-and takes place only for very short periods. There are no children in detention at present.

Lord Foulkes of Cumnock: Is the Minister aware that the Government kept their promise to end the detention of children in Dungavel in Scotland by shipping them hundreds of miles away to detention in Yarl's Wood? The Observer reported on Sunday that the replacement for Yarl's Wood is no better than Yarl's Wood. How will the Government end what Nick Clegg described as a moral outrage or will this be another pledge he wishes he had not made?

Baroness Neville-Jones: My Lords, the Observer is inaccurate. It is not the case that the accommodation that will be provided will be "no better than Yarl's Wood". The picture painted of the current Yarl's Wood was inaccurate. The Labour Benches opposite will know something about the changes that they made. The accommodation will not be like Yarl's Wood and will not contain any means of detention.

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The Archbishop of Canterbury: My Lords, the Government will be aware of the Church's continuing acute interest in this subject not least because of an open letter to all party leaders that was sent before the general election touching this question. What are Her Majesty's Government's plans to keep monitoring the psychological and mental medical impact of detention upon children and families and the impact of some aspects of the whole regime that currently obtains, including the practice of dawn raids, the proposed suggestion of indeterminate dates for expulsion and comparable matters? Will Her Majesty's Government be prepared to raise and press some of these issues with other European Union countries?

Baroness Neville-Jones: My Lords, the most reverend Primate raises a number of important points. The reason why we are concerned about the mental condition and psychological effect on children and their families of what has hitherto been the practice is the reason why this Government made a commitment to end the detention of children for immigration purposes. We will honour that commitment.

As a result of the number of questions that I have been asked on this subject, I have kept the House aware of the pilots that we are already conducting to alter procedures such that some of the things that have been mentioned will no longer take place. There will not be a need for the "raids" that used to take place. We are endeavouring to bring about a system that ensures that those who are not entitled to be in this country are not able to stay here and that they are not able to abuse the system, but that in its procedures is humane and just.

Baroness Afshar: My Lords, I declare an interest as someone who is involved in the Child M question and has raised the question of children in detention. It seems to me that the treatment of these children as numbers rather than as human beings, and the idea that they are a category that belongs or does not belong in this country, simply denies them their rights as human beings. Can we please take these cases as human beings and think what we would do if these were our children? I feel that Child M is being pulled every which way. The family is breaking up and the future of that child is being destroyed. We talk about future pilots. Here is an example. Please let us do something.

Baroness Neville-Jones: I say to the noble Baroness that these pilots are in progress; they are not future pilots. We are endeavouring to introduce means by which we can encourage families to return on a voluntary basis. I lay stress on the fact that we keep families together as much as we possibly can. It is now a very rare circumstance, such as, possibly, the brutality of parents within a family, that would result in family separation. We try to keep families together. Our aim is to get them to depart voluntarily if they are not entitled to be in the country and, if they do not do so, to make as humane arrangements as we possibly can to remove them, but we do not intend to involve detention in that process.

Lord Roberts of Llandudno: My Lords, is the Minister aware that in seven months we as a Government have made more progress to end the detention of children

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for immigration purposes than the Labour Party did in 13 years? Can she arrange a visit to Yarl's Wood to enable the noble Lord, Lord Foulkes, the most reverend Primate the Archbishop of Canterbury, the noble Baroness, myself and others to see the ending of that desperately sad regime?

Baroness Neville-Jones: My Lords, I have already offered the possibility of a visit to Yarl's Wood, which will, in due course, become a centre for adults only. However, I would be very happy to demonstrate to Members of this House the arrangements that we are piloting and hope to put in operation shortly. As I said, there will be a Statement on this issue before the Christmas Recess.

Superannuation Bill

Bill Main Page


3.36 pm

Clause 1 : Consents required for civil service compensation scheme modifications

Amendment 1

Moved by Lord Brett

1: Clause 1, page 1, line 1, at end insert-

"( ) Section 1 of the Superannuation Act 1972 is amended as follows.

( ) In subsection (3), after "consult" insert ", with a view to reaching agreement,".

( ) In subsection (3A) after "consult" insert ", with a view to reaching agreement,"."

Lord Brett: My Lords, Amendment 1 stands in my name and that of my noble friend Lord McKenzie of Luton. As my noble friend Lord McKenzie said in Committee, this is a straightforward amendment designed to clarify the purpose of consultation, emphasising that consultation should aim to reach agreement. In Committee, the Minister expressed reservations that this amendment was drawn too widely in respect of the 1972 Act, but recognised that the Government's aim, like that of the previous Administration, was to seek to reach agreement by consensus where possible. There have been discussions between the Civil Service trade unions and Ministers in this respect and the Government have now submitted Amendments 2 and 4, which are grouped with Amendment 1 and which I take to be an endeavour to offer the reassurance sought in Amendment 1. While I clearly prefer the simplicity of our amendment, I await the Minister's arguments in support of his amendments with interest. I hope that our thinking is as one, even though our amendments may use different language. I beg to move.

Lord Wallace of Saltaire: My Lords, it may be helpful if I begin by reminding your Lordships of the main outcome that the Government are seeking to achieve in securing agreement to this Bill, which is to enable necessary reform of the Civil Service Compensation Scheme. Our goal in effecting this reform is to put in place a scheme, following consultation with the Civil Service trade unions, that is affordable, sustainable for the long term and fair not only to civil servants but to

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other taxpayers. This is not an initiative of this new Government but an issue that we inherited from our predecessors. Indeed, the previous Government negotiated for 18 months with the Civil Service trade unions and had a scheme to propose in February this year, which was then challenged by one of the unions and struck down in a judicial review.

I have described previously the intensive discussions between the Government and the Civil Service unions since my right honourable friend the Minister for the Cabinet Office, Francis Maude, announced on 6 July his intention to push through reform of the compensation scheme. Since Grand Committee, which took place three weeks ago, some of the unions have begun to ballot their members on a new scheme based on the agreement reached on 5 October between the Government and the negotiating teams of five of the six Civil Service unions.

The key elements of the new scheme that we propose to introduce include: a standard tariff for compensation payments; an entitlement for a three-month notice period on redundancy, whether voluntary or compulsory; significant protection for lower-paid civil servants; limitations on payments to higher-paid civil servants; and, lastly, the ability to access an unreduced pension for staff who have reached minimum pension age.

The Government listened carefully to points made by those noble Lords who spoke in Grand Committee about the purpose and structure of the Bill, as well as underlying concerns about how reform of the scheme would be achieved. We have brought forward some further amendments, which we believe address these points, as I will explain in due course. I hope that we will be able to use this Report stage to ensure that the Bill meets our goals of supporting a new, affordable, fair and sustainable compensation scheme and of providing that the Civil Service and the Government are not left in limbo over the reform of this scheme.

In speaking to Amendment 2, I will also address Amendment 4, which is simply a consequential drafting amendment, and respond to the points raised by noble Lords opposite on Amendment 1. Indeed, these government amendments are specifically intended to respond to the identical amendment that the Opposition tabled for Grand Committee and to the discussion that followed about the way in which consultation should be carried out.

Amendment 1 would insert into the Bill the words,

in references to consultation on schemes under Section 1 of the Superannuation Act 1972. It would in practice render my Amendment 2 unnecessary, as it covers the substance of my amendment and much more besides. That is why the Government have brought forward Amendment 2, to address the specific issue of consultation on the compensation schemes that are covered by this Bill.

The Grand Committee agreed to amendments that I had tabled to deliver the undertaking made in another place to reinforce the requirement for meaningful consultation with the unions before any compensation scheme is imposed. Those amendments inserted what is now Clause 2 of the Bill. The coalition Government

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firmly believe that a requirement to consult already carries with it the implication that the consultation must be genuine and that proper consideration must be given to the response. However, we were happy to set out in primary legislation our commitment to meaningful consultation, which we have also reiterated in both Houses of Parliament.

It is also the intention of this Government that any consultation that we carry out under the 1972 Act would be begun with a view to reaching agreement. Clause 2 already uses the words,

in respect of the report that the Government will in future be required to lay before Parliament about changes to the scheme. The noble Lord opposite pressed me in Grand Committee to make our intention clear in the Bill and to apply the same words expressly to the requirement to consult.

I do not think that there is much between us as to the aim and purpose of these amendments. However, as I explained in Grand Committee, the Government have reservations as to the breadth of the scope of the amendment from the noble Lords opposite. It would take us very much wider than the process of changes to Civil Service compensation, which is the key purpose of the Bill. Amendment 1 would in practice apply also to schemes in relation to pensions and injury benefits, which are subject to different regimes for consultation and agreement and which we have not otherwise considered in this Bill. The Government were therefore not able to accept the amendment in Grand Committee and this has not changed.

Nevertheless, I have reflected carefully on the points made by the noble Lord, Lord McKenzie, in Grand Committee. He said then that it should not be contentious to seek to emphasise that the aim of consultation should be for it to lead to agreement. Indeed, the Government would not wish to contend with that view. I also understand that inserting the wording,

explicitly into the requirements for consultation in the 1972 Act is seen by the Civil Service trade unions as an important indicator of the Government's good faith in continuing to try to find agreement through negotiation. I have, therefore, brought forward Amendment 2, which relates, like the rest of Clause 2, to any cases where changes are proposed that would reduce the value of compensation benefits, in order to address that point. It will not have the effect of restoring the union veto on reform, which Clause 1 will remove, and it will not apply, as Amendment 1 would, to consultations on the much broader range of schemes covered by Section 1 of the 1972 Act. Those extend beyond the main business of the Bill, which we have had the opportunity to discuss in detail. However, it will make it absolutely clear that the Government will now have a duty to consult with a view to reaching agreement where there is any future proposal that would have the effect of reducing the amount of compensation benefits payable to civil servants.

I say to the noble Lord, Lord McKenzie, that I was persuaded by his arguments in Grand Committee but that, for the reasons that I have explained, I still prefer the approach in the Government's amendments. I hope

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that noble Lords are persuaded, as I have been, that this amendment rounds out and reinforces the statutory commitments to meaningful consultation on compensation schemes. I also hope that it succeeds in meeting the substance of the genuine concerns raised by noble Lords opposite and that, therefore, they will agree to withdraw the amendment.

3.45 pm

Lord Brett: My Lords, I am grateful to the Minister for that explanation. A number of amendments tabled by the Opposition and indeed a number of speeches made from all sides in Committee were about the confidence that is required to carry forward what is a contentious piece of legislation for those civil servants who will be worse off financially than they would have been under the provisions in the 1972 Act and beyond. However, I take the point made by the noble Lord regarding our endeavours to engender a degree of confidence in respect of the compensation element, which is the issue in this Bill. In the circumstances and with the strength of the reassurances given, I do not feel it necessary to test the opinion of the House and I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 2 : Consultation in relation to civil service compensation scheme modifications

Amendment 2

Moved by Lord Wallace of Saltaire

2: Clause 2, page 2, line 22, at end insert-

"( ) After subsection (3C) insert-

"(3D) So far as it relates to a provision of a scheme under the said section 1 which would have the effect of reducing the amount of a compensation benefit, the duty to consult in section 1(3) of this Act is a duty to consult with a view to reaching agreement with the persons consulted.""

Amendment 2 agreed.

Amendment 3

Moved by Lord Brett

3: Clause 2, page 2, line 28, leave out "such information as the Minister considers appropriate" and insert "information"

Lord Brett: My Lords, Amendment 3 stands in my name and that of my noble friend Lord McKenzie. Clause 2, as amended in Committee, requires the Minister to lay certain information before Parliament regarding the consultation undertaking in respect of the new Civil Service Compensation Scheme prior to the scheme coming into operation, with such information to be limited to information that the Minister considers appropriate. Again, we believe that that undermines confidence, as many people feel that it might be misused to withhold from Parliament information that would be influential in the subsequent discussions and debates that might take place.

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We believe that constraining the information in such a way is unnecessary and will certainly not engender the confidence in the consultation process that I think everyone involved wants to see. I do not say that such is the Government's intention, but unfortunately the wording in its present form to some degree undermines the confidence that we seek to restore. Our amendment seeks to remedy the situation by removing the ministerial discretion to limit the information. I trust that this will not be considered controversial and that the Minister will not feel the need to resist Amendment 3. I beg to move.

Lord Wallace of Saltaire: My Lords, we had a useful and constructive discussion on this in Grand Committee and I was persuaded by the strength of the argument put forward by the noble Lord, Lord McKenzie, at that time. We took the matter back and discussed it and now wish to accept this opposition amendment.

There was a perfectly good reason for the original wording that the noble Lord now proposes should be removed. It was simply intended to clarify that there might need to be some discretion about what precisely would be included in the published report of the consultation that had been carried out with the Civil Service trade unions. For example, some details might need to be omitted on the grounds that they should be held in confidence, such as a negotiating position set out by a particular union during the consultations that it asked should be treated in confidence.

However, I agree that it is unnecessary to insist on this wording as to what constitutes information. The report will be produced by the Minister for the Civil Service and will, in any event, include only information which he considers appropriate and which does not breach confidences from the negotiations. I agree that this need not be spelt out in the Bill, so I am happy to say that, with what I hope the Opposition will accept as good grace, the Government accept the amendment.

Amendment 3 agreed.

Amendment 4

Moved by Lord Wallace of Saltaire

4: Clause 2, page 2, line 36, leave out "amendment made by this section applies" and insert "amendments made by this section apply"

Amendment 4 agreed.

Clause 3 : Limits on value of benefits provided under civil service compensation scheme

Amendment 5

Moved by Baroness Donaghy

5: Clause 3, page 2, line 41, leave out "the following limitations" and insert "agreement reached following consultation and negotiation with the relevant trade unions"

Baroness Donaghy: My Lords, I have pleasure in moving this amendment on behalf of my noble friend Lady Turner of Camden, who, as noble Lords will know, was taken ill on Monday. She was unable to attend the House today, but I am pleased to say that she is now at home. I am a lifelong admirer of

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Lady Turner and I hope that I can do justice to her amendment. I have a guess that this amendment might not be received in the same way as one or two of the previous ones.

These are worrying and uncertain times for civil servants, with their job security, pensions and standard of living under attack. I am sure that many noble Lords have received letters from individual civil servants about the impact of this Bill on their lives. They entered the Civil Service with certain expectations about their job security and pensions. The impact on their morale should not be underestimated, and I am concerned that the public focus on Civil Service pay and pensions is always on the higher paid. I notice that when this was discussed on 10 November, one contribution made out that an annual salary of £40,000 to £50,000 was the norm. I know that Members of this House will realise that that is not the norm. The majority of civil servants earn very modest salaries and even more modest pensions. It is not my intention to hold up the House by quoting the figures, but I know that the Minister will be aware of them.

I acknowledge the reassurance of the noble Lord, Lord Wallace of Saltaire, that negotiations will be genuine. However, the general tenor of the Bill will not reassure civil servants. I believe that it is reasonable to reach agreement with trade unions. There is a long and honourable tradition of this in the joint Civil Service negotiating bodies and I hope that the Bill's tenor will do nothing to undermine it. It is in that spirit that I move the amendment tabled by my noble friend Lady Turner.

Lord McKenzie of Luton: My Lords, I thank my noble friend Lady Donaghy for stepping into the breach. She did indeed do justice to our noble friend and colleague Lady Turner. Perhaps we can take this opportunity of sending our best wishes to her for a speedy recovery.

I very much agree with the thrust of the amendment, which pretty much replicates a debate that we had in Grand Committee. The difficulty, in a sense, is that the approach is predicated on Clause 1 not standing part of the Bill, so there is a potential inconsistency between these two provisions. In so far as the cap is concerned, we are very clear that it should go from the Bill in its entirety, which would negate this amendment if it were to be pressed and were successful. However, we agree that there must be consultation with every effort made to end up with a negotiated settlement. My right honourable friend in the other place, Tessa Jowell, made clear that we accept that there would be circumstances in which changes would have to be made that did not rely on agreement. We do not recognise this lightly, nor indeed does the Minister. To that extent we may differ a little on my noble friend's amendment, but we have some other amendments constructed to achieve in large measure the same thing, which is to get rid of the caps.

Lord Maclennan of Rogart: My Lords, I thank the noble Baroness for moving the amendment and I join the noble Lord, Lord McKenzie, in sending good wishes to the noble Baroness, Lady Turner. However, I fear the amendment as drafted goes too wide, as was implicit in the remarks made by the noble Lord, Lord McKenzie.

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It might have the effect of reinstating the veto, which it is the purpose of this Bill in large measure to withdraw. I am glad to recognise what was said in another place by Tessa Jowell and the inconsistency of that, as I see it, with the amendment tabled.

Lord Wallace of Saltaire: My Lords, I join other noble Lords in sending our best wishes to the noble Baroness, Lady Turner of Camden. I served on a committee with her when I first became a Member of this House and have been very fond of her ever since. We look forward to having her back with us. She played a useful and constructive role in our Grand Committee discussions.

In Grand Committee we discussed the question of the balance of pay with trade unionists and I remarked at the time that we need to understand how many low-paid civil servants there are and to construct a scheme which is as fair as possible to the lower-paid. As the noble Baroness will know, one of the elements of this scheme is that all those earning under £23,000 who are offered redundancy will be treated as if they were earning £23,000. So built into the compensation scheme are limitations for the small number of civil servants who are paid £150,000 or above and much greater benefits for that large number of civil servants who earn below the medium wage. I hope that this has the sympathy of all Members of the House because it is part of what this scheme is intended to achieve.

Although this amendment seeks to amend Clause 3, to some extent it contradicts Clause 1, as the noble Lord, Lord McKenzie, pointed out. The Government are not therefore able to accept it as it is not entirely clear what its implications would be. As I have already made clear, the Government are committed to full consultation with the Civil Service trade unions over the long term. However, the recent history of changes proposed to the Civil Service Compensation Scheme both by the previous Government and by the coalition Government shows that a requirement to reach agreement can lead to stalemate where the Government of the day are unable to implement the changes that are necessary or agreed with the majority of unions.

So in practice the drafting of the amendment may not have the effect that the noble Baroness, Lady Turner of Camden, would want it to achieve. It does not just apply to changes in the compensation scheme but rather to the scheme as a whole. I am sure I do not need to tell noble Lords that the Government would not want this to be the case. Nevertheless, I appreciate the opportunity that the noble Baroness's amendment provides to emphasise yet again our commitment to meaningful consultation and our determination on the other hand not to allow any union to have a complete veto over changes that may be proposed to the Civil Service Compensation Scheme. This is an important point which we take as seriously as the noble Baroness does and we are determined that it is the lower paid civil servants who will have the most generous benefits, as we have proposed in the current scheme. We have therefore pushed this scheme forward and are puzzled by the resistance of one of the unions to a scheme that seems to us to be better for the lower-paid than the alternatives that that union seems to prefer.

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4 pm

I turn to the drafting of the amendment. On several occasions in Grand Committee I heard the noble Baroness express genuine concern for civil servants who are at risk of redundancy. Many of us, me included, have received many letters from civil servants. There are also a good many low-paid HMRC civil servants where I live in Yorkshire, so I not only receive letters but hear about it from people in the pub. I am therefore entirely sure that it is not the noble Baroness's intention that the amendment should jeopardise any compensation payments to civil servants in that position. As drafted, however, Amendment 5 does not achieve what she seeks to do-even if the Government were minded to support it, which we are not. Once the Bill receives Royal Assent, it is our intention to lay before Parliament the revised Civil Service Compensation Scheme which, in our view, will be fair to civil servants and affordable for the taxpayer.

I hope that I have provided sufficient clarification about the intention of the coalition Government's policy and the legislation to deliver it, and that I have explained my concerns about the effect of this amendment. I therefore ask the noble Baroness to withdraw it.

Baroness Donaghy: My Lords, I neglected to declare an interest: I am in receipt of a very small Civil Service-related pension as former chair of ACAS. I apologise to the House for not having done that. In the light of the statements made, it does not seem sensible to press the amendment to a vote. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6

Moved by Lord McKenzie of Luton

6: Clause 3, page 2, line 43, leave out subsections (2) to (ii) and insert-

"(2) Where a civil service compensation scheme, or any part of that scheme, is challenged in Court, the provisions of that scheme and any settlement made under that scheme shall remain in place until the Court has made a final determination about the legality of that scheme."

Lord McKenzie of Luton: The purpose of this amendment is to consider alternative options to resolve the problem which the caps are said to be intended to address. We remain firm in our view that the caps are not necessary, are counterproductive and would present their own series of operational complications if they were ever in effect and applied.

As a responsible Opposition we have sought to get to the heart of the issue. Following deliberations in Grand Committee, we received a helpful letter from the Minister, dated 16 November. Based on this communication we understand that the Government's concern is that, in the event of a challenge on the legality of any new scheme, the courts will reinstate the unaffordable current scheme. In his letter, the Minister notes that once litigation has been started, that alone will put a question mark over which scheme should be regarded as being in force at any one date before all the appeals have been exhausted. The Government are concerned that, in this interim period,

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the default position as applied by the courts will not be the new scheme which we understand the Minister intends to lay before Parliament in January, but the more expensive current scheme. The Minister states in his letter that it should be Parliament that decides the default position-which, by implication, is to be the caps. The Minister argues that if the challenge is on human rights grounds, the courts would not have the right to set aside limits in primary legislation but would be limited to declarations of incompatibility.

The purpose of our amendment is to address this uncertainty in another and, we hope, less complicated and more effective way. The effect of the amendment would be to state quite clearly in primary legislation what would happen during a period when the scheme was undergoing a legal challenge that had not reached a conclusion. Rather than revert to the caps, the Act would stipulate that the scheme in operation would be the default position until the validity of the new scheme had been determined. Things would eventually come out in the wash when the court process had run its course. We will come to a substantive debate on the caps in the next group of amendments, and we consider that there are compelling reasons to remove the caps in their entirety. We are supported in this position by the recent report by the Joint Committee on Human Rights which cast doubt on the benefit or extent of the certainty that the Government would achieve by relying on this mechanism.

I should make it clear that we do not intend to press this to a vote, nor are we wedded to this precise wording. However, we are firmly of the view that if the Government consider that a fallback in primary legislation is necessary-we do not-it must not be the caps locking in via primary legislation. The scheme most recently introduced, albeit by order, is potentially one way of achieving this. I look forward to the Minister's reaction to this amendment. Perhaps, when he responds, he will also cover what alternative mechanisms have been considered to address his concern. I beg to move.

The Chairman of Committees (Lord Brabazon of Tara): I understand that there is a mistake in Amendment 6 as printed in the Marshalled List. Instead of "(2) to (ii)" it should read "(2) to (11)".

Lord Wallace of Saltaire: My Lords, I appreciate that we will come on to caps in a later amendment, so it is a little difficult to know whether to respond in detail now or to leave it to later. We discussed this delicate set of issues quite extensively in Grand Committee, and I subsequently set out in a letter, which the noble Lord, Lord McKenzie, has mentioned and which has been placed in the House of Lords Library, that I wished to avoid being in the position that followed the High Court's judgment of May 2010, which resulted in the February 2010 arrangement being squashed and the pre-February scheme being largely revived. I reiterate our strong intention to ensure that the proposed new scheme is legally robust and our consequent view that the scheme would ultimately survive any legal challenge.

Nevertheless, it is open to anyone to seek to challenge the scheme now or in the future, regardless of whether their intention is rational or their arguments are ultimately found to be meaningful by the courts. Such a challenge

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could result in the scheme being suspended until due legal process has been pursued. The Government take court rulings very seriously; we would always give the most serious consideration to court judgments and would certainly take the necessary steps to take account of any final ruling. As I previously explained, the question that arises is what the default position should be during any period of uncertainty caused by litigation. The Government continue to believe that it is right that Parliament, a democratically accountable body, should decide in an Act of Parliament what the default position should be, and that is the reason for Clause 3 as it is currently drafted.

I do, however, feel certain that a court would have views of its own about an Act of Parliament containing the approach set out in Amendment 6. This seeks, in effect, to oust the court's power to strike down a scheme, an approach which the courts have often felt to be misconceived and on which the Government would not therefore be confident to rely. I also note that the drafting of the amendment is a little vague, which would not be helpful in conveying to a court a clear meaning of Parliament's intent. For example, given all the opportunities for appeal or for proceedings to be taken on to the European Court, how could anyone be certain that the "final determination" has been made? Even if the intention and the process could be made sufficiently clear, I am not convinced that a court would always accept that a compensation scheme that is being challenged qualified as a scheme that should remain in place during that challenge.

I emphasise once again, as we did on several occasions in Grand Committee, that the coalition Government hope not to need to use the powers in Clause 3, nor the powers in Clause 4 that support them. What we want is a new, reformed, sustainable, affordable and fair Civil Service Compensation Scheme that can be implemented once this Bill has received Royal Assent and which will mean that we will never need to use the caps in Clause 2. If we are taken to court and therefore need to fall back to a provision that means that the necessary reductions in the Civil Service workforce can be made without disproportionate cost and perverse effects, it is more reasonable to rely on such caps than on a clause that attempts pre-emptively to bind the court.

We shall shortly have the chance to discuss Clause 3 again as drafted, along with the provisions in Clause 4 that provide for the repeal, extension or revival of Clause 3. I do not think it would be right for us to agree to an amendment that might be interpreted by some as seeking to constrain the powers of the courts. So, for the reasons that I have given, I hope that the noble Lord will withdraw his amendment.

Lord McKenzie of Luton: My Lords, I thank the Minister for his explanation of why the Government are unable to accept this amendment. As I explained when I introduced it, we did not propose to test the opinion of the House, but simply to probe alternatives to the use of the caps as the default position. With respect, the Minister has said why he does not like our formulation, but he has not dealt with the point about what formulations other than the caps have been considered to create the certainty that he seeks and

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considers is necessary in circumstances where there is a challenge. We do not object to Parliament deciding in an Act of Parliament what that default position should be.

I take the point that the formulation of our amendment could be seen as seeking to oust the power of the courts.

A noble Lord: My Lords-

Lord McKenzie of Luton: My noble friend suggests otherwise. I am reassured by that intervention, if it is in support of our amendment. Will the Minister and his team reflect further on this matter? It is difficult to conceive that the only default position would be the caps. We will come on to why the caps are so offensive to many and why we think that it is misguided to retain them. If he Minister does not like our alternative formulation, will he enter into discussion to see what alternatives there might be that do not involve the default position being those caps?

We have all had correspondence from people about their fear of the caps and what it may mean to their compensation arrangements. Being able to remove that without wishing to detract from the Government's position of wanting some protection and a fallback is worthy of further exploration. I simply do not believe that you could have only the caps and no other formulation. I beg leave to withdraw the amendment and, in doing so, I ask the Minister to reflect further on this issue. We would be happy to have discussions with him between now and Third Reading to test the alternatives that might give him the protection he wants without those caps.

Amendment 6 withdrawn.

Amendment 7

Moved by Lord McKenzie of Luton

7: Clause 3, leave out Clause 3

Lord McKenzie of Luton: My Lords, in speaking to Amendment 7, I shall speak also to the other amendments in this group. The purpose of this amendment is abundantly clear. It would remove Clause 3. Amendments 9, 10 and 14 are consequential, as the removal of Clause 3 would obviate the necessity of sunset and sunrise clauses, and provisions relating to orders. With the deletion of Clause 3, the caps, which have been at the core of so much dissatisfaction with this Bill and with this process, would go. They remain a continuing source of anxiety and many civil servants who fear redundancy believe that their compensation will be a fraction of what they hitherto considered to be their entitlement.

The caps set out in the Bill are not only punitive-certainly in relation to the current scheme-but they are, in terms of the Government's own position, redundant. If the caps are a blunt instrument supposedly needed as a basis for discussion and to force agreement with the trade unions, they are no longer necessary, as an agreement is no longer a precondition of introducing a changed compensation scheme. We know that the Government are actively working up the detail of a scheme, which is expected to be introduced shortly

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after this legislation enters into force. Before the scheme order is laid, Clause 3 will have to be repealed for the scheme to be effective.

4.15 pm

The further reason the Minister has advanced for retaining the caps is that they are needed in reserve. We have just touched upon that issue. The Joint Committee on Human Rights, however, has blown the cover on this. Removal of this clause would go some way to addressing the anger that accompanied its inclusion in the Bill and would place the emphasis back on the need for consultation and negotiation. It would remove a genuine source of anxiety for those who expect to be made redundant and who fear that, by one means or another, the caps will define their compensation.

We have been encouraged in our determination to remove these caps by the latest report of the JCHR in HL Paper 64. The committee considers, contrary to the view of the Government, that the Bill in its current form engages Article 1 of Protocol 1 to the European Convention on Human Rights. It was very clear that the legitimate expectation of obtaining effective enjoyment of a property right can and does amount to possessions in this case. Individuals have acted on reliance on their expectation that they will receive certain sums-for example by entering into mortgage commitments-in the belief that, even in redundancy, their commitments could be met. The committee's view is that the limits on compensation payments set out in Clause 3 of the Bill clearly constitute an interference with that right, but not a deprivation of it. It is the Government's obligation therefore to seek to justify that there is a sufficiently compelling public interest in doing so, provided the interference is not arbitrary, is proportionate and does not affect the very substance of the right.

In summarising the Government's justification-basically, affordability and the lack of comparability with other parts of the public and private sectors-the committee considers that the case has not been made for the limits, or caps, imposed in the Bill. The limits in the Bill are, as we know, less generous than those that the Government have said that they are prepared to agree to and, indeed, have agreed to with five trade unions. References to blunt instruments and the Government's minimum negotiating position, the committee says, are not compatible with the argument that the limits in the Bill are a necessary and proportionate interference with civil servants accrued rights.

Clearly it is too late for the Government to unpick their previous justification for the caps, but there can be no doubt that their retention, revival and potential use damages any case that changes to the CSCS are a justifiable interference with civil servants accrued rights. Far from help the Government's position, it can be concluded that the preservation of the caps makes it more likely that the Government's approach will be treated as incompatible with the convention.

We debated a moment ago the supposed fallback protection that the caps provide in the circumstances of a legal challenge. The JCHR was sceptical about this leading to less legal certainty, because the Government would ultimately have to remedy any incompatibility by compensating all those affected. The JCHR's view is that the route to minimise legal uncertainty is not

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questionable distinctions between the relative uncertainty of incompatible primary or subordinate legislation, but by providing limits on compensation that are capable of stronger justification.

There are overwhelming reasons why the caps in this clause should go from the Bill. They are more trouble than they are worth to the Government; they do not contribute to the scheme that has been negotiated; they are an impediment to trust and negotiation with trade unions; their continued existence makes defence of incompatibility with the human rights convention more difficult, if not impossible; and they create a range of practical difficulties. Worst of all, they create real distress and uncertainty among our civil servants. It is time to give them up.

I beg to move.

Lord Wallace of Saltaire: My Lords, the noble Lord opposite has raised a wide range of issues about the Bill. I recognise, again, the concern that a lot of civil servants have about the caps-perhaps on the misunderstanding that these are the only thing on offer. The Government have made it clear-and I will spell this out in answering a later amendment-that it is their intention to be more generous than the minimum caps expressed in the Bill. I remind noble Lords that Clause 3(11) gives the Government power to increase the compensation scheme but not to decrease it.

As noble Lords will recognise, the Bill at various points goes rather deeply into the relationship between Parliament and the courts. To anyone who would like to sink even more deeply into that area, I can recommend the evidence being given by various law professors to the European Scrutiny Committee in another place, where the doctrine of parliamentary sovereignty and the extent to which it depends on court rulings are being discussed in absorbing but extremely lengthy detail.

Today, the Minister for the Cabinet Office wrote to the chair of the Joint Committee on Human Rights. That letter will be in the House of Lords Library by the end of today; I hope that it will also be copied to noble Lords opposite. Perhaps it would be helpful if I read out two paragraphs from it. They state:

"I welcome the Committee's acknowledgement that measures interfering with the peaceful enjoyment of possessions are capable of being justified by a sufficiently compelling public interest provided the interference is not arbitrary, is proportionate and does not affect the very substance of the right ... Your report goes on to say that in the context of economic and fiscal policy generally, the European Court of Human Rights allows a considerable degree of latitude to States in deciding what is in the public interest, and that it is reluctant to interfere with that judgment unless it is manifestly without reasonable foundation. You also note that the European Court of Human Rights has generally been deferential to arguments of fiscal necessity although it has carefully preserved a scrutiny role and made clear that even interferences which are justified by fiscal considerations must not be arbitrary or so excessive that they remove the very essence of the right. As both this Government and its predecessor concluded, the current scheme is simply unaffordable for the taxpayer and over-generous when compared with comparable schemes elsewhere".

I reiterate the point that the caps that Clause 3 sets out on the value of benefits under the Civil Service Compensation Scheme are a fallback. I have just explained that the Government are not persuaded that there is a better way to provide it. There is broad agreement that the compensation scheme must be

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reformed. Your Lordships will appreciate that, after two years of negotiation, we now need to proceed with a new scheme with some urgency, not only because the economic situation requires it but because civil servants will become even more anxious if the current uncertainty remains for longer.

The retention of Clause 3 means that a failure to implement a new scheme would prevent government departments making the changes to their workforce that they need to make for the future as well as now. The clause guards against a situation in which we would have no choice but to revert to the old scheme, which is, as I have said, unaffordable, unsustainable and out of place.

I appreciate that the other amendments which are grouped with Amendment 7 are consequential on it, since, if Clause 3 were not part of the Bill, much of Clause 4 would also not be needed. None the less, I am well aware that there is also concern about the power in Clause 4 to extend or revive the caps in the Bill, particularly some of those that would be among those deleted by Amendments 9 and 10. As Members who have read their Marshalled Lists will note, I have already put down amendments, which I hope we will have the opportunity to discuss later, which seek to respond to points made in this House and the other place about some of those delegated powers.

The Government are determined to ensure that there is certainty that a new and affordable compensation scheme can be put in place. I very much hope that that is the consensus among all your Lordships. The Government remain convinced that Clause 3 and the provisions that support its variation are the appropriate and proportionate way to secure that certainty. For these reasons and all those that I have previously given, I ask the noble Lord opposite to withdraw Amendment 7. I repeat that I shall say something further on a later amendment about the way in which we hope to provide a more generous compensation scheme.

Lord McKenzie of Luton: I thank the Minister for what he said in his response, although it does not take us far enough. I look forward to what he has to say on subsequent amendments and look forward to reading a copy of the letter from the Minister for the Cabinet Office.

From what was quoted from that letter, it did not seem to deal with the particular point about the caps being arbitrary and disproportionate. The Government in their own language have talked about them as blunt instruments and have identified them as a minimum and as a starting point for negotiations. The Government themselves have, in agreement with most of the trade unions, developed a scheme which is substantially in excess of what those caps provide. The very existence of those caps, according to the JCHR-and one can see the reasoning-are a threat to the compatibility of the policies with the convention. It does not help the Government's case at all to retain those caps. On the basis of what the Minister argues, is it not the case that it would take only one person to appeal the new scheme for the Government to consider imposing the caps? They would remain an ever present threat for all of our civil servants while that is under way. That is one of the reasons why they should go from the Bill.

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I can see from the Minister's face that I am unlikely to convince him and to cause him to change his mind immediately. What I need to do is to test the opinion of the House on this matter.

4.27 pm

Division on Amendment 7

Contents 161; Not-Contents 222.

Amendment 7 disagreed.

Division No. 1


Ahmed, L.
Andrews, B.
Archer of Sandwell, L.
Armstrong of Hill Top, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Billingham, B.
Bilston, L.
Borrie, L.
Boyce, L.
Boyd of Duncansby, L.
Bradley, L.
Bragg, L.
Brennan, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Carter of Coles, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Corston, B.
Crawley, B.
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Donaghy, B.
Donoughue, L.
Dubs, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Falkender, B.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Giddens, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grenfell, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Howarth of Newport, L.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Janner of Braunstone, L.
Jones, L.
Kennedy of Southwark, L.
King of West Bromwich, L.
Kingsmill, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lofthouse of Pontefract, L.
Low of Dalston, L.
McAvoy, L.
McDonagh, B.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mandelson, L.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Mitchell, L.
Morgan, L.
Morgan of Drefelin, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Moser, L.
Myners, L.
Nye, B.
O'Neill of Clackmannan, L.
Parekh, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.

1 Dec 2010 : Column 1497

Peston, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rees of Ludlow, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Gilmorehill, B.
Snape, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Wall of New Barnet, B.
Warner, L.
Watson of Invergowrie, L.
Wedderburn of Charlton, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.


Aberdare, L.
Addington, L.
Alderdice, L.
Allenby of Megiddo, V.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Ashdown of Norton-sub-Hamdon, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Ballyedmond, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Best, L.
Bew, L.
Bichard, L.
Bilimoria, L.
Black of Brentwood, L.
Bonham-Carter of Yarnbury, B.
Boswell of Aynho, L.
Bradshaw, L.
Bridgeman, V.
Broers, L.
Brooke of Sutton Mandeville, L.
Brookeborough, V.
Brougham and Vaux, L.
Burnett, L.
Buscombe, B.
Caithness, E.
Carey of Clifton, L.
Cathcart, E.
Chadlington, L.
Chalker of Wallasey, B.
Clement-Jones, L.
Cobbold, L.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Courtown, E.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
De Mauley, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dykes, L.
Eames, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Exeter, Bp.
Falkland, V.
Falkner of Margravine, B.
Faulks, L.
Feldman, L.
Fellowes, L.
Finlay of Llandaff, B.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geddes, L.
German, L.
Glasgow, E.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Greaves, L.
Grey-Thompson, B.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Harries of Pentregarth, L.
Harris of Richmond, B.
Henley, L.
Higgins, L.
Hooper, B.
Howard of Lympne, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Hussein-Ece, B.
Inglewood, L.

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James of Blackheath, L.
Jay of Ewelme, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Jopling, L.
Kakkar, L.
Kimball, L.
King of Bridgwater, L.
Lamont of Lerwick, L.
Lang of Monkton, L.
Lawson of Blaby, L.
Lindsay, E.
Linklater of Butterstone, B.
Listowel, E.
Liverpool, E.
Lothian, M.
Lucas, L.
Lyell, L.
Macdonald of River Glaven, L.
Macfarlane of Bearsden, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Maginnis of Drumglass, L.
Maples, L.
Marland, L.
Marlesford, L.
Mawson, L.
Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Montrose, D.
Morris of Bolton, B.
Neuberger, B.
Neville-Jones, B.
Newby, L.
Newcastle, Bp.
Newton of Braintree, L.
Nicholson of Winterbourne, B.
Noakes, B.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
O'Loan, B.
O'Neill of Bengarve, B.
Palmer, L.
Palumbo, L.
Pannick, L.
Parkinson, L.
Patel, L.
Patten, L.
Perry of Southwark, B.
Phillips of Sudbury, L.
Pilkington of Oxenford, L.
Popat, L.
Prashar, B.
Ramsbotham, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rennard, L.
Ritchie of Brompton, B.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rogan, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shipley, L.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Slim, V.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stewartby, L.
Strathclyde, L.
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4.40 pm

Clause 4 : Final provisions

Amendment 8

Moved by Lord McKenzie of Luton

8: Clause 4, page 4, line 31, at end insert-

"( ) Section 3 comes into force at the end of the period of 1 month beginning with that day."

1 Dec 2010 : Column 1499

Lord McKenzie of Luton: Amendment 8 addresses a practical issue concerning the timing for a new scheme, the coming into force of the Bill and the operation of any caps, now that they look likely to remain. It would delay the commencement of Clause 3, which sets the caps, until a month after the Act is passed by Parliament. Indeed, we would be amenable to a later date, should the Government consider that more time is necessary; or to the more flexible option of that clause being subject to a commencement order to be laid by the Minister.

We took from our earlier discussions that the sequence of events would be as follows. On day one, the Act would enter into force. On day two, Section 3 would be repealed by order. On day three, an order outlining the new CSCS would be laid, to be brought into effect immediately. However, from our discussion with the Minister and his officials earlier this week, it appears that there may now be a noticeable gap between the entry into force of the Act and the laying of the scheme order. This may be influenced by the timing of the conclusion and outcome of trade union ballots, which we understand will be on 14 January 2011. We are concerned that this delay will mean that people will be subject to the effects of the caps before the Government get around to repealing them and making an order for the new CSCS.

This produces an intolerable situation, in which those made redundant or agreeing to voluntary separation between entry into force of the Act and the laying of the order for the new scheme would face the limits imposed by the caps. It would be possible to cater for this by inserting a delay for the coming into effect of Clause 3, hence our amendment. We have assumed a delay of one month but the Minister may wish to comment on whether this period is likely to be sufficient. As noted, an alternative way of dealing with this would be for there to be a power to bring the section into being by order so that alignment could be assured, although Clause 4(4) might need to be adjusted if this route were followed.

This practical issue is yet another reason why the caps are more trouble than they are worth and why they should be removed from the Bill, but I acknowledge the vote that we have just had. However, if removal or delayed introduction are not supported, what will happen in this interim period? Will departments be advised not to proceed with any separations until a new scheme or order is made? What advice has been given to date? When we raised this issue with the Minister in our meeting, it was clear that officials had not given total thought to the matter. What reassurance can the Minister now give to civil servants who are expecting redundancy? If Royal Assent is given before the Recess and the new scheme does not come into effect until mid-January, or even later, it will consign potentially thousands of civil servants to a pretty miserable Christmas. How will the Minister ensure that there is a level playing field in operation? Since each department is, I understand, a separate employer, it would remain within the discretion of a department to treat individual employees as it saw fit. In the absence of repealing Clause 3, this would mean that it had to impose the statutory maximum on any redundancy payments. This would be the law. What is to stop

1 Dec 2010 : Column 1500

departments with hard-pressed budgets being tempted to proceed in the window where the caps drive the compensation limits? Should this happen, what commitments should be given about bringing people up to the level of the new scheme when this is introduced?

These are real practical issues. We do not raise them just to be picky over the wording of the Bill. If the caps are to take effect in the circumstances outlined, they will have a real and detrimental impact on the lives of people subject to the scheme. If the Minister is not able to meet us on the detail of the amendment, I would press him to be very clear on the record about how the Government are to handle these matters. I beg to move.

Lord Maclennan of Rogart: My Lords, I feel some sympathy with the practical inquiries that have been made. It appears unlikely that there will be no redundancies between the date of the passage of the Bill and the introduction of the new compensation scheme. It is also possible that someone may test the compatibility of the Act with the human rights convention before the new compensation scheme has been introduced. Some reassurance is needed. The Government have given indications that they do not wish there to be a significant lapse of time between the enactment of the Bill and the introduction of the new scheme-which would obviate the problem-but that is not now a certainty. In those circumstances, if the Minister is not able to answer the question today, it would be very helpful if he undertook to answer this after due consideration of the issues raised by the noble Lord, Lord McKenzie.

4.45 pm

Lord Wallace of Saltaire: My Lords, the Opposition wish to cast me-or the Government-as Scrooge, or I believe it is the Grinch that the younger generation talk about. The idea that the Government are looking for the opportunity to dismiss huge numbers of civil servants between 23 December and 10 January is an interesting but an unlikely one-indeed, an unreal one. The Government are still looking to lay the new scheme on the second sitting day following Royal Assent. An order to move the caps would be laid in the first sitting day following Royal Assent, which would have advice issued on the operation of the cap by the Minister to the department. As we have already said, we would be minded to increase the level if no agreement has been reached. As the noble Lord has already remarked, a number of unions are already balloting their members on the scheme that has currently been offered, with the negotiation and participation of several of the unions concerned.

One Government or another have, for two years or more, been negotiating on this scheme. Further delay does not seem desirable. I offered repeated assurances about the Government's purpose in retaining, and our intentions on using, Clause 3 in the Bill-whether there might be some circumstances in which, for whatever reason, the new scheme could not be implemented. We do not see a justification for any further delay. I am not persuaded that we should accept Amendment 8 or any other proposal to further delay any part of this package. The Government are able to carry through

1 Dec 2010 : Column 1501

the implementation rapidly. Members will understand that government, as well as Parliament, tends to slow down a little over the Christmas and new year break. If these matters are not completed by the time we rise on 22 December, action will be taken very quickly when we all return on 10 January. It is not an enormous delay and I therefore do not see the necessity of the amendment. I therefore ask him to withdraw it.

Lord McKenzie of Luton: My Lords, I thank the Minister for his response but it does not altogether deal with the issue that I seek to raise in this amendment. I can see that if the new scheme proceeds very quickly in early to mid-January, there is a limited window within which my concerns might arise. However, as I understand it, there is no certainty that the date will be the middle of January; it could be later. We do not know what will happen with the trade union ballots and whether that may affect the Minister's view. This is absolutely not about delay because it does not touch on the date for the introduction of the scheme; it is about seeking to align the time at which the caps bite with the scheme, otherwise you would have a period in which the caps drove the compensation scheme, and that is a cause for concern.

I can see that encouragement and guidance might be given but, at the end of the day, departments are their own masters in this matter and in circumstances where departments are faced with very squeezed budgets the measure could give rise to difficulties. If the scheme is laid on 10 January-I think that is what the noble Lord suggested-I accept that there is only a very narrow window. If there were to be a wider gap-I think that this is taking us on to the next amendment-one way the Government might respond would be to increase the caps under Clause 3(11). That would certainly help to ameliorate the issue but not deal with it completely. Perhaps we should await the debate on the next group of amendments, but the Minister might reflect further on this. I hope that he will be as specific as he can on the record-if not today, perhaps at Third Reading-on a not insignificant gap opening up between the date that the caps come into effect, the date that the scheme is laid and comes into effect, and the Government's response to that. That would be helpful because, as I say, we have identified a genuine concern. I am grateful to the noble Lord, Lord Maclennan, for recognising that concern. I am happy to leave it at that for now but ask the Minister to reflect further on this to see what reassurance he can give on the record in the event of the gap widening. Subject to that, I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Amendments 9 and 10 not moved.

Amendment 11

Moved by Lord McKenzie of Luton

11: Clause 4, page 5, line 1 after "(5)(c)" insert-

"(a) may only be made if, at the same time, the Minister makes an order under section 3(11) of this Act to align the provisions of section 3(2), as far as practicable, with the current terms of the civil service compensation scheme; and


1 Dec 2010 : Column 1502

Lord McKenzie of Luton: My Lords, in moving Amendment 11, I shall also speak to Amendment 12. We have been unsuccessful in deleting Clause 3, although we expect it to be repealed at some stage before the new scheme is introduced. The Minister has confirmed that that is the case. Government Amendments 13 and 15, which we will support, mean that Clause 3 can be revived for a period of up to six months, provided that the revival takes place within the three-year period starting when the Act is passed.

Amendment 11 would require that any revival of Clause 3 must be accompanied with an order under Clause 3(11) uprating the caps to a level consistent with the CSCS then in operation-that is, the revised CSCS introduced by order following the coming into force of the Act. It is accepted that a precise alignment may not be possible, hence the "as far as practicable". I cannot see that the Government should have any difficulty with this unless there is an issue about wording, which could be revisited at Third Reading. It is understood that this would be their intention in any event. I think that the Minister hinted that that was the case in our debate on the earlier amendment, but perhaps he would confirm that. There would be no downside, as the measure would align the caps only with the new scheme; there is no additional financial commitment. It would help to address the concerns raised by the JCHR and provide some comfort to civil servants who believe that, at the end of the day, the caps will determine what they get.

Amendment 12 would reduce the time during which revival can take place from three years to one year. We have heard no detailed explanation of why three years is included in the Bill, so the Minister might take this opportunity to explain that in a bit more detail. He might also take the opportunity to be a bit more specific about the precise circumstances and the process under which any revival might proceed. I beg to move.

Lord Wallace of Saltaire: My Lords, I thank the noble Lord for the care with which he has approached this entire Bill. It is a complicated Bill and a complicated scheme; all those in the previous Government and in this Government who have been involved in these negotiations will know how complex it is, particularly when issues of judicial challenge come in. I assure your Lordships, once again, that the Government intend to repeal Clause 3 when the new scheme is ready, in order to enable that scheme-as I have explained, we have agreed that it will be more generous than the minimum reasonable levels set out in the caps-to be laid before Parliament and to take effect. It is not our intention to leave the caps in force for any length of time, since we want to make progress in delivering a reformed compensation scheme for the Civil Service. However, if Clause 3 were not yet in force when the new scheme is ready, as we hope will be the case before the end of the year, we would need to do one of two things. We would either proceed with laying the scheme before Parliament, without having available for several weeks the potential fallback of Clause 3, or we would move that a new scheme be put into place at that point.

I have listened with interest to the noble Lord's detailed arguments and I thank him for giving me notice of Amendments 11 and 12 earlier this week.

1 Dec 2010 : Column 1503

I have some sympathy for the reasons behind Amendment 11, but I shall explain that there are reasons why the Government are unable to accept this particular approach. The noble Lord has made it clear that Amendment 11 is aimed at testing the intention behind the power in Clause 4 to revive the caps in Clause 3 and to ensure that they would be reviewed if there were circumstances in which they had to be revived at a later date.

Our view is that there are some significant problems with the drafting of Amendment 11, which we do not think could be resolved. First, the amendment requires the revived caps to be aligned,

On the face of it, this might mean maintaining compensation payments as closely as possible with the terms of the proposed new Civil Service Compensation Scheme, which it is intended to put in place as soon as possible after the Bill receives Royal Assent. However, if the new scheme were struck down by challenge in the courts, it seems quite possible that it would not be interpreted as "the current terms"; rather, those terms might need to be interpreted as the terms of the previous, pre-2010, scheme, which would solve nothing, as that is the scheme that both this Government and our predecessor concluded must be reformed.

Even if this were not the case, the wording,

is not at all clear and might itself be subject to challenge. It would not be as simple as the Government changing the caps to the numbers of months' service specified in the scheme-for example, replacing 15 months with 21 months. We have made it clear that such an approach would not work, as staff accrue compensation payments differently under the existing and proposed new schemes and so simply changing the number of months stated in the caps would not keep compensation payments within the same cost envelope. We are simply not confident that the words "as far as practicable" would provide sufficient flexibility to set caps that would fully take account of differences in accrual or other issues determining the likely profile of departures.

While for these reasons I have considerable difficulties with the drafting of Amendment 11, that is not the end of the matter. The Government have provided in the Bill a power at Clause 3(11) to increase by order the number of months specified in the caps. I emphasise again that this is a power to increase and not a power to decrease the caps. The powers are there for a reason, which is that, just as the noble Lord has indicated, there might well be very good reasons why the caps should be increased should they need to be imposed following a revival of the provisions in Clause 3. If the Government had no intention of ever increasing the caps, they would not have sought this power.

5 pm

I hope that the noble Lord will accept that if, following the expected repeal of the caps in Clause 3, it is necessary at some stage in the future to revive the caps, the coalition Government will undertake to review their level. Should there be a genuine problem that could result in the imposition of the caps leading to a

1 Dec 2010 : Column 1504

general reduction in the value of compensation benefits payable, we will indeed use the power to increase them.

The commitment that I am putting on the record today is this: if we need to use the revival power in Clause 4 to bring back the caps because the new Civil Service Compensation Scheme is set aside, we will, first, undertake to review what the impact of operating the caps would be compared to the new compensation scheme; and, secondly, if there were a significant detriment in practice in operating the caps as they are, we undertake to table an order under Clause 3(11) to increase the caps to such a level that would, as far as is both fair and affordable, reflect what would otherwise apply under the new scheme. I am not sure that I can say any more, as the circumstances that we are talking about might never arise. However, if they do, that is what the Government will do. I very much hope that that provides the reassurance that the noble Lord is looking for to enable him to withdraw Amendment 11.

I cannot accept Amendment 12 either, but for rather different reasons. In Grand Committee, I brought forward government amendments to limit the period within which the powers in Clause 3 could be revived to three years. I believe that that is a reasonable timescale. I am afraid that a one-year limit simply will not do, as a legal challenge could quite possibly still be in progress within that time. Such a challenge might not set aside the new scheme-we might not know until after the end of legal proceedings what the position would be-so we would not necessarily need, at the outset, to revert to the existing, unaffordable scheme. Thus, we would need to apply the caps. Indeed, it is even possible that one would not have emerged within such a short a period as 12 months.

Of course, I understand that the powers to revive primary legislation by order are unusual and should be used sparingly. That is why we introduced the three-year limit. Also, as we shall be discussing under the next group of amendments, that is why we have accepted the arguments made in Grand Committee that we should not be allowed the power to extend beyond three years by order. I believe that that is a considerable concession. For those reasons, I cannot accept any further reductions to the limits that we have set and, therefore, I ask the noble Lord not to move Amendment 12.

Lord McKenzie of Luton: My Lords, I thank the Minister for what he has put on the record, which is helpful. Obviously we shall want to read what he has said and reflect on it. I noted that there were references to "significant detriment" and "fair and affordable", which is not overly precise language. However, I accept the thrust of what he said, which provides some comfort on the issue of revival of the caps. The noble Lord, when a little on the back foot, sought to pick away at the detail of an amendment-I suppose I did that as a Minister-but, if necessary, that could be tidied up at Third Reading. The key thing is that we have something robust on the record. I would like to reflect on this and to read Hansardjust to see in the cold light of day how far this goes, but it has been helpful. There is certainly no intention to press these amendments to a vote today. I beg leave to withdraw the amendment.

1 Dec 2010 : Column 1505

Amendment 11 withdrawn.

Amendment 12 not moved.

Amendment 13

Moved by Lord Wallace of Saltaire

13: Clause 4, page 5, line 2, leave out from "passed" to end of line 10

Lord Wallace of Saltaire: In moving Amendment 13, I shall speak also to Amendment 15. These are government amendments, but I am pleased to say that, unusually, they have the support of a broader coalition with the Front Bench opposite, as I am pleased to see that the noble Lords, Lord McKenzie and Lord Brett, both have their names to these amendments on the Marshalled List. The Government responded to criticism from the Delegated Powers and Regulatory Reform Committee of the unlimited time in which the caps proposed in what is now Clause 3 could be revived by introducing a three-year time limit. The government amendments in Grand Committee were intended to respond to that concern; as I made clear then, the Government accept that there should not be an unlimited power to revive Clause 3. Such a power might then be used many years in the future, in circumstances that we could not predict today and would clearly be unjustified.

However, on reflection, I believe that the amendments that we tabled then may not have had the desired result. In Grand Committee, there was a moment when I recognised that the Government were in a rather weak position, when it was pointed out by noble Lords that, while we had put a time limit on the power to revive the caps in Clause 3, we had not at the same time introduced a power to extend the time limit by a further six months. Had we done that, that power could be used to further extend the power by another six months and another six months, and so on indefinitely. Indeed, the noble Baroness, Lady Drake, commented,

I had to admit that she was probably right. I trust that your Lordships recognise that, when it is clear that the effect of the powers in a Bill do not achieve what the Government had intended to do, we will try to put it right. That is what we are doing in this amendment today.

Accordingly, we have decided that, for clarity, we should dispense completely with any power to extend further beyond three years the time limit on the power to revive the caps in Clause 3. That is what these amendments will achieve. On that basis, I beg to move.

Lord Brett: My Lords, my noble friend Lord McKenzie and I have indeed put our names to these amendments. I will avoid wincing a second time at the use of the word "coalition". It represents, I believe, not so much a coalition but, because we see repentance of sinners, more a congregation. Suffice it to say that I think we have unanimity on this, and I also am moved to support the amendment.

Amendment 13 agreed.

Amendment 14 not moved.

1 Dec 2010 : Column 1506

Amendment 15

Moved by Lord Wallace of Saltaire

15: Clause 4, page 5, line 20, leave out "or (7)"

Amendment 15 agreed.

Public Bodies Bill [HL]

Main Bill Page

Committee (3rd Day)

5.10 pm

Schedule 1 : Power to Abolish: Bodies and Offices

Amendment 19

Moved by Lord Greaves

19: Schedule 1, page 16, line 10, leave out "Agricultural dwelling-house advisory committees."

Lord Greaves: My Lords, we resume our rapid canter through the Committee stage of the Bill. Amendment 19 refers to the,

"Agricultural dwelling-house advisory committees",

in England and seeks to remove them from Schedule 1. I am not arguing that this is exactly what we should do. This is a probing amendment to establish who will carry out the important role of these committees in the relatively small number of cases involving agricultural tenants of tied housing, in which some 30 per cent of agricultural workers live. They are guaranteed security of tenure in their tied housing for fairly obvious reasons: their housing is tied to their job and their job is tied to their housing. That is a relatively unusual situation nowadays; it used to be a lot more common.

These committees were established under the Agricultural Wages Act 1948 and are now established under the Rent (Agriculture) Act 1976. They are convened locally and hear about 40 to 50 cases each year. Membership is drawn from membership panels that are maintained by the Defra offices in Crewe and Bristol and the meetings are set up on an ad hoc basis according to the business to be conducted. They are not terribly high-powered bodies in the sense of always being in session and always having a lot of business. They have a relatively small amount of business, but it is important. They consist of one member who represents agricultural worker interests and is nominated by the trade union Unite; one member who represents agricultural employer interests and is nominated by the National Farmers' Union; and one independent member who acts as chairman and is appointed from a panel of persons approved by the Secretary of State for Environment, Food and Rural Affairs.

Agricultural workers living in tied cottages generally have security of tenure, but a farmer may apply to the local housing authority to have a protected worker rehoused if he or she needs the cottage for a replacement agricultural worker in the interests of efficient agriculture. In such circumstances the local housing authority, the farmer or the cottage occupier can ask an ADHAC to advise on the applicant's case to determine whether it is in the interests of efficient agriculture and urgent. In

1 Dec 2010 : Column 1507

other words, although the committee can be asked to intervene by any of the parties to the dispute and to the attempt to evict the farm worker from his tied accommodation-in other words, the farm worker or the employer-in practice, the usefulness of these committees is to provide advice to the local housing authority, or the local council, on whether it is a reasonable request.

That is the nub of it. I am not arguing that ADHACs should continue in their present form. It may well be that the number of cases that are dealt with each year is relatively small, and that they could be dealt with in some other way. Some other body could be charged with advising the housing authority, and in this respect I am aware of the position when an application is made for planning permission for a house or cottage to be built in an area of the countryside where it would otherwise not be allowed because of planning rules on building new dwellings in open countryside, on greenbelts, or whatever. What tends to happen is that the planning authority, which is part of a unitary local authority or, in two-tier areas, the district, seeks advice on whether the accommodation is sensibly required from the appropriate department of the local authority responsible for farming and agriculture in the area. In two-tier areas that will be the county council, and in single-tier areas it is another department of the same authority.

There is a duty to advise a housing authority on whether it is reasonable to require the local authority to provide accommodation for someone who is otherwise in tied accommodation, so putting that duty on the relevant department of the local authority-whether it is another department of a unitary or the county council in a two-tier area-is a sensible way forward. It could provide the same safeguards and advice, which the housing authority will need anyway, within the wish of the Government to abolish this particular board organisation. There are sensible ways forward, but they require a bit of care and application by the Government not simply to abolish the agricultural dwelling house advisory committees without having first made appropriate arrangements for other bodies to do what they do because it is a very useful and necessary function. You only have to think of the situation in which you are in tied accommodation because you have been a worker on a particular farm, but you have retired, the farmer needs your house or cottage, you need to be rehoused, and the housing authority needs to have specialist advice as to whether it is a reasonable application to take precedence over all other applications for housing in that area. I hope that I can get an answer from the Government that is sympathetic to what I am putting forward. On that basis, I beg to move.

5.15 pm

Lord Clark of Windermere: My Lords, I follow in the tone of the noble Lord, Lord Greaves, who moved this amendment in a very moderate way. He said "necessary" provision. The role of the agricultural dwelling house advisory committees is very limited and focused. Nevertheless, it is critical to the individuals affected. Indeed, over the years the committees have helped greatly to facilitate on the one hand the evils of

1 Dec 2010 : Column 1508

tied housing and on the other hand the needs of the farmer to get access to his tied house for his necessary employees. So there is a real difficulty there. We are talking about agricultural workers, but the tied cottage also applies to other related employees, such as gamekeepers and gardeners. I am conscious that tied-housing problems remain in urban areas, but the problem is probably not as great in those areas because there is more alternative accommodation in the form of affordable housing, council housing, and so on. In many rural areas the provision of affordable housing is quite low. So the demand is there. This may not be the vehicle to meet the demand, but we need to be reassured that the Government have thought this through and are certain that the new system that they need to put in place will meet the necessary requirement to which the noble Lord, Lord Greaves, referred.

I well remember the Labour Government's 1976 Act at that time, how it seemed to be a major step forward and how it increased the work of the agricultural dwelling house advisory committees. Over the years the numbers have clearly fallen and the system seems to have worked, but the housing problem in rural areas is deteriorating. Increasingly, there is a demand for people to live in rural areas, a demand for second homes, and a demand for holiday homes as well. Often these are not only the modest cottages that one was used to in the past but increasingly ex-council houses as well. I see the noble Lord, Lord Henley, is here. He is aware that in parts of Cumbria many of these council houses are now used as holiday homes, so the reservoir of affordable housing is decreasing.

All Governments have recognised, in a different sense, that servicemen leaving the services should have priority in affordable housing. The decrease in the number of available houses for rent in rural areas plus the increasing demand for the remaining houses lead us to ask the Government whether they have thought this through. I can see their feeling, need and desire to get rid of the statutory bodies and understand it completely, but we must be convinced that the alternatives of the big society and localism, which the Government seem to espouse so much, will apply. I see nothing in the Bill or in what I have read to convince me that this has been thought through, but I remain to be convinced by the Minister later this afternoon.

Lord Newton of Braintree: My Lords, I rather rashly intervene to express my general support for the thrust of the amendment moved by the noble Lord, Lord Greaves. I declare an indirect interest as my wife is a member of the planning authority in the area in which we live-Braintree in Essex-and I know that some of these problems occasionally land up with that committee. I am not an expert, but I think what the noble Lord, Lord Greaves, said about the need for some kind of expert advice in areas where the issue is whether there is an agricultural need is important. I hope that my noble friends on the Front Bench can meet it.

Lord Whitty: My Lords, I agree with the general thrust of the approach by the noble Lord, Lord Greaves. I am certainly not arguing for the status quo, although this body has helped to solve a number of acute cases for individual retired farm workers, farmers who

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desperately need the accommodation to attract further labour and local authorities faced with the housing crunch to which my noble friend Lord Clark referred, so it has been a useful institution. The demand is diminishing, but it is important that we know what will replace this body.

I will make an additional point to the Minister because it goes to the heart of the way in which we are dealing with the Bill. In Schedule 1-and the same will apply to some extent to other schedules-each body has a particular situation to deal with and the Government appear to envisage different consequences of the abolition of those bodies. It is important that this House knows what is in the Government's mind to replace what has hitherto been an important, if diminishing, function. It is important that we have this in writing, not simply as a reply in the debate. Some of us argued for a Select Committee procedure that would have allowed that to happen away from the Floor of the House, if necessary, and on a different basis of consideration. In this, as in so many other areas, we need to know the total picture. I make a plea to the noble Lords, Lord Henley and Lord Taylor, that as we go through the stages of this Bill, and it looks as though it will be quite a lengthy process, they provide us with that kind of information so that we can have a more rational debate. I make the point on this institution because it is one about which I do not disagree with the Government, but we need to know in all cases what is intended to replace these bodies.

The Earl of Caithness: My Lords, like the noble Lord, Lord Clark of Windermere, I remember the 1976 Bill coming through Parliament. I was on the Benches that he is sitting on now. I thought it was a bad Bill then, and it has remained a bad Act, in particular with regard to ADHACs. The noble Lord, Lord Greaves, said that this body is necessary. If it had been necessary, it would have been compulsory to have consulted an ADHAC. As it is, it is a purely voluntary agreement that an ADHAC can be used for consultation with the housing authority if necessary. The vast majority of cases are dealt with directly with the local housing association, so "necessary" was not the right word to use in this instance.

The noble Lord, Lord Greaves, said that there are 40 to 50 cases a year. I question that. My information is that the number is almost in single figures now. Sixteen ADHACs have some 10 cases a year in total. That means that half of them are not doing anything at all. It is high time we got rid of them, and I thoroughly support my noble friend in this. Could I just ask him whether, when we come to the follow-up legislation, he will propose to get rid of all 16 ADHACs at once, rather than one by one?

Baroness Quin: My Lords, I support the noble Lord, Lord Greaves, in having tabled this amendment, which allowed this issue to be aired through this short debate. I know that he had some support from my noble friends who added their names to his amendment, which is symptomatic of a wider concern than if the amendment had simply been tabled in his own name. It shows concern that the issues that the agricultural dwelling house advisory committees have been dealing

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with are still important to address for the future in whatever way the Government are envisaging. We will be very interested to hear how the Minister responds to this debate.

It seems to me that the scale of the issue is quite important, despite what the noble Earl, Lord Caithness, has just said. As I understand it, 30 per cent of agricultural workers live in tied accommodation. Given that there are some 150,000 agricultural workers, we are talking about a considerable number of people who could avail themselves of this service. Obviously, there is some dispute about the figures; I am also aware of the figures cited by my noble friend showing that the advisory committees deal with about 40 to 50 cases each year. The noble Earl has given us different figures. Perhaps the Minister, in his reply, might like to give us the official Defra figures for this process.

Even if the figures are lower than I and my noble friends believe, that does not necessarily mean that all the committees should disappear. There might therefore be an argument for rationalising the structure. I do not know if this is something to which the Government have given consideration. If there are cases-sensitive cases, because they concern people's accommodation and whether they are going to be able to stay in their homes or be forced to move-being dealt with properly by the committees in a sensitive and efficient way, then it would be very unwise to simply disband the committees without having some very clear assurance as to how these matters will be dealt with in future. Perhaps the Minister can give us some figures showing whether the tempo of consultations and referrals to the committees has increased or decreased in recent years. The noble Lord, Lord Greaves, was quite right to stress, as the major point of his argument, the importance of how these issues are going to be dealt with in future and whether there will be people who know of the special circumstances of agriculture and the agricultural industry who will be able to deal with them.

Consultation is also important. I see that the noble Lord, Lord Taylor of Holbeach, is in his place. Much to the House's pleasure, he gave it some assurances about the consultation process to which he was committed while taking forward the provisions in this Bill. It would therefore be interesting to know what consultation has taken place so far on this issue with those likely to be affected and those who are members of the committees at the moment, and to know whether they judge their work likely to decrease or increase. After all, there are quite a number of different and even specialised aspects to agricultural tenancies; for example, the different types of tenancy-protected, statutory or assured. We need to know that there will be people who understand how the system works and will be able to operate it in future. The point has also been made to me that when farm workers come up for retirement but want to stay in their homes, that can be a difficult time. Therefore, we are entitled to ask who will represent and support farmers at that stage of their lives and in those circumstances.

5.30 pm

The Minister and, no doubt, noble Lords around the House will have seen the recent Joseph Rowntree report about income standards and conditions in rural

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areas. It came out last week and makes a number of interesting points, not least that which was referred to by my noble friend Lord Clark of Windermere when he talked about the lack of availability of affordable housing in rural areas, which makes the issues that we are looking at important. There are also planning difficulties. It was interesting to hear the contribution of the noble Lord, Lord Newton of Braintree, to this debate.

I understand the costs of removing these committees to be in the order of £13,000, which is rather a modest sum. It is strange that on the previous group of amendments, which we considered the other day, many of us had the impression that the bonfire of quangos was largely about saving money and deficit reduction, yet so far the amounts at which we have been looking have been very modest. Therefore, we are right to ask whether these modest reductions in costs will lead to something worth while. It has been somewhat puzzling to see how modest the costs have been in terms of the measures with which we have been dealing.

Finally, I should also like to ask about the situation regarding this area in the devolved territories. Certainly, on the Welsh Assembly Government's website there is still information about how to apply to agricultural dwelling house committees. It would be good to know from the Minister what consultations he has had with his counterparts in the devolved Administrations and whether they have raised some of the concerns about the way forward which have been raised today.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): My Lords, in moving this amendment, my noble friend Lord Greaves said that this was his first amendment during what he described as a rapid canter through Committee on this Bill. I am not much of an equestrian, but "rapid" and "canter" are not the words that I would necessarily give to it at this stage. But I accept that my noble friend was merely putting forward a probing amendment. Therefore, I will try to set out why we think it is right that we are abolishing these committees.

As many noble Lords have said, ADHACs were set up under the Rent (Agriculture) Act 1976. The noble Lord, Lord Clark of Windermere, remembers the Act, as does my noble friend Lord Caithness. Sadly, I was not in the House, so I cannot go back quite that far. But I listened to both of them and they had rather different views. My noble friend made clear that ADHACs were set up to have an advisory role-I was very grateful he stressed that-in the rehousing of agricultural workers. To get on to the whole problem of accommodation in rural areas is stretching the point a bit too far. We are talking only about ADHACs and the advisory role that they had.

The purpose of the Act was to give those who lived in tied houses, such as agricultural workers, former workers and their successors, security of tenure and protection from eviction by their employer. Under the Act, a landlord can make an application to a local housing authority to rehouse a protected tenant on the grounds that the property is required for a new worker; that he is unable to provide suitable alternative

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accommodation for the existing tenant; and that the housing authority ought, in the interests of efficient agriculture, to provide suitable alternative accommodation. The landlord, the tenant or the local authority may refer such applications to the local ADHAC for advice on the agricultural need and the urgency of the application. However, there is no statutory requirement to consult an ADHAC. Again, I am grateful to my noble friend for stressing that point. Where advice is sought, the housing authority is currently obliged to take that advice into account when considering its housing priorities. But it is only a matter for the housing authority to take that advice into account.

Since the Rent (Agriculture) Act came into force, there have been significant changes to housing legislation, which have enabled farmers to let cottages to farm workers using an assured shorthold tenancy. As a result of these changes and changing employment practices within the farming industry, the use of ADHACs has fallen from what used to be something of the order of 500 cases per year in the 1980s to something fewer than 10 this year. To assist the noble Baroness with those figures, I can tell her that in 2007 there were nine cases, in 2008 there was a dramatic increase to 12, and in 2009 there were a further 12. So far we have had eight this year. As the noble Lord, Lord Whitty, put it, demand for this service is diminishing-and it is diminishing pretty fast.

In the light of this, the Government consider that, as the functions of the ADHACs are largely defunct, it is difficult to justify the retention of 17 different committees. Again, my noble friend referred to 16 different committees; I can assure him that there are 17 different committees covering England and Wales, with the associated administrative burden of recruitment and training of members. I appreciate that the cost is relatively low. The noble Baroness, Lady Quin, asked whether it was just £13,000. That is the figure I have for the direct administrative costs, but there will be other costs to the department in terms of the secretariat needed for 17 different committees in England and Wales.

Furthermore, it should be made clear that the function can be, and indeed is, carried out equally effectively by the local housing authorities on their own account, as my noble friend Lord Greaves seems to suggest. Many local authorities already take decisions on rehousing without the advice of an ADHAC. I can assure the Committee that the abolition of ADHACs will not remove any of the protection afforded to agricultural workers and their successors in tied housing. The only change will be when a local authority receives an application for rehousing a worker in a tied cottage; the local authority will need to determine the agricultural need and urgency of the application on its own account, as it does now in the vast majority of cases. Again, I stress, we have had eight uses of ADHACs in this year. I imagine, as we are already into December, that figure is unlikely to increase by that much.

There is no intention to change the provisions in the 1976 Act which give security of tenure to protected tenants; tenants will not be disadvantaged by the proposed abolition of ADHACs.

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The noble Baroness, Lady Quin, asked about devolved Administrations-obviously in this case we are talking only about Wales, because this part covers only Wales. Yes, we will consult the Welsh Administration in the appropriate manner.

Finally, my noble friend Lord Caithness asked whether-or seemed to imply-we would need 17 different orders to abolish these. My understanding is that the power is such that there will be only one. I think that we-the noble Baroness as the opposition spokesman, and I as the Minister dealing with this in the Moses Room-will have to deal with only one rather than 17 different ones; I cannot remember whether the procedure is affirmative or negative. I hope with those reassurances my noble friend will feel able to withdraw his amendment.

Lord Greaves: My Lords, I am grateful to everybody for the constructive and consensual way in which the amendment has been discussed. The question of the number of individual cases per year has been raised. I am sorry if the figures I cited were rather larger than is actually the case. The figures came from what I took to be an official authoritative source on the internet, but perhaps that is a lesson for us all. I will go back and check that source, but that is clearly what it said.

A question of general interest was raised. I deliberately did not call the bodies "quangos", for the very reasons that noble Lords mentioned; that is, that their scale and cost are small. In many ways, they strike me more as part of the big society than as quangos, but perhaps I should not pursue that very far. Perhaps there are parts of the big society which have performed a useful function in the past and are now redundant.

The Minister responded to my use of the phrase "rapid canter". It is always a little dangerous to try to use irony in your Lordships' House, not least because Hansard has not yet got round to the use of smileys, which, as many of us know to our cost, are necessary if you are trying to say something ironic because a lot of people will otherwise read it absolutely flatly. I therefore make it quite clear that I was being absolutely ironic in talking about taking a rapid canter through the Bill, but-who knows?-it may be a rapid canter by the time we have finished.

I am very grateful for the Minister's assurances that the legal protection for people who have tied tenancies will not change in any way. On that basis, and on the basis that I think that we have had the kind of discussion that I would have hoped for to make the position absolutely clear, I beg leave to withdraw the amendment.

Amendment 19 withdrawn.

Amendment 20

Moved by Lord Greaves

20: Schedule 1, page 16, line 11, leave out "Agricultural Wages Board for England and Wales."

Lord Greaves: My Lords, this is a much more substantive and important amendment-not that the last one was not important, but this one is much more so. I shall speak also to Amendment 21, which is

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grouped with and linked to it. Amendment 20 is about the agricultural wages board, whose purpose is to set the scale of agricultural minimum wages and related minimum terms and conditions of employment. It is an independent statutory body established by the Agricultural Wages Act 1948, and it goes back in its lineage as far as 1924, when there were far more agricultural labourers than there are now.

The question posed by the amendment is: are the functions of the AWB still needed, in whole or in part; and if they are still needed, in some way at least, is the best way to carry them out through the continued existence of the AWB or in some other way? There has been pressure for its abolition. The NFU has called for it, although not all farmers who employ agricultural workers would welcome that because it provides them with a clear framework of what they should be paying without having to negotiate. Its abolition was promised in the Conservative manifesto at the last election. It was not in the Liberal Democrat manifesto and was not in the coalition agreement. It is opposed by the relevant trade union, Unite. That information sets the amendment in its political context, but, as we know, the manifestos on which the last election were fought are probably redundant following the formation of the new coalition Government.

Liberal Democrat spokespersons, including my honourable friend Andrew George in the House of Commons, have expressed concern at the abolition and the potential removal of existing protections. The proposal to abolish the body was announced by the Secretary of State, Caroline Spelman, on 22 July, but it was done so, to the best of my knowledge, without any prior consultation. Any consultation would still have to take place.

The agricultural wages board consists of 21 people, comprising eight representatives of the employers, nominated by the NFU; eight representatives of the workers, nominated by Unite; and five independent members, including the chairman, appointed by the Secretary of State and the Welsh Assembly Government. I shall not speak much about the regional agricultural wages committees, which are the subject of the second amendment in the group, but they are linked to the AWB and basically set up by the same legislation.

5.45 pm

What does the AWB do? It meets each year to make an Agricultural Wages (England and Wales) Order, which sets the agricultural minimum wage and other terms and conditions from 1 October each year. It may meet again to make amendments during the year.

The agricultural minimum wage must not be lower than the national minimum wage. There are currently six categories determined according to responsibilities and qualifications. It starts with grade 1, which is a few pence above the national minimum wage and is basically for unskilled, temporary and seasonal workers. At the moment it is £5.95 an hour, £232.05 a week. The other five grades are higher than that, as you might expect. Grade 2, for example, is the standard worker grade and it requires some minimum basic qualifications or certain responsibilities such as working with animals or driving a tractor, and that is £6.58 an

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hour. The grades progress to grade 5, the supervisory grade, at £8.23 an hour and grade 6, the highest, which is the farm management grade. The recipient of this grade may have responsibility for a whole farm and for employing and disciplining staff, so it is not a trivial job. The minimum rate for that is £8.88 an hour at the moment, £346.32 a week. These are not huge salaries and wages by any stretch of the imagination, but they do provide a guarantee for people working within the farm industry.

It is generally recognised that reform and modernisation are needed, and the board itself is keen to change the structure of the arrangements to a degree, and to change the consultation arrangements and procedures. For example, there is clearly a need now for the minimum wage in each category to be stated in annual, rather than in hourly or weekly amounts, and there is clearly a possibility that the whole system could be simplified and that some of the detail could be removed from it. But this still applies to 154,000 workers. It is not something trivial that can be discounted on the grounds that it is no longer needed because there is hardly anybody involved. There are far fewer than there used to be, but nevertheless, there are still 154,000 workers-that is 154,000 families. It is a lot of people.

What will happen if the agricultural wages board is abolished? Will there be a new national system set up? Will there be a bargaining system set up within the industry-an unofficial system, as it were-outside the purview of statutes and government, in which employers and representatives of agricultural workers negotiate? Or to what extent will it be left to individual farmers to negotiate with their own workers or just impose the terms and conditions and wages that they want to impose above the national minimum wage?

It has been said that the national minimum wage now makes the AWB unnecessary, but quite clearly that is an argument that would apply only to the very basic level of grade 1, which only applies to a minority-I think it is about 20 per cent of workers. The cost of the organisation is reported as £195,000, together with servicing costs from Defra itself of £77,000 which totals £272,000. This is not insignificant even nowadays, but again, it is not a huge figure.

Two questions arise. First, if it is abolished, in the absence of protection, what is to stop wages and terms and conditions of employment being squeezed, being forced down due to the pressure that we all know exists on farm gate prices, particularly from supermarkets and from food processors? At the moment, many farmers are adversely affected by market conditions and by their inability to match the monopoly powers of the people that they sell their produce to. However, they cannot compensate for that by reducing the wages that they pay below the AWB rates-the minimum agricultural wage rates. If they were able to do that, it seems highly likely that it would happen in a significant number of cases and wage rates would go down. Unite believes that if that happened, industrial action would be inevitable. I cannot comment on that and have no

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idea whether it is true. But I believe that if agricultural wages were to fall in the present circumstances, that in itself would be wrong.

The second question is: what is the best way forward? If savings can be made and the system can be streamlined to an extent, I do not think that any of us would disagree with that. I am certainly not going to go to the wall to defend the existence of a particular quango-and I think that this probably is a quango. The AWB as it stands may or may not be the best way of doing it. I am not asking the Government to stand and have an argument today and in future weeks over the existence of a particular body; I am asking them to look for a better way forward without prejudicing existing protection for what is still a relatively vulnerable group of workers. I beg to move.

Baroness Prosser: My Lords, I support the amendment put forward by the noble Lord, Lord Greaves. I also declare an interest as a member and previous deputy general-secretary of what is now the union Unite, which, as has been said, is the union that organises agricultural workers.

The noble Lord, Lord Greaves, said in moving this amendment that the agricultural wages council has been with us for a very long time. It came from the original trade board which was introduced at the very beginning of the previous century. When the Bill setting up that board and a number of other councils covering other areas of industry was introduced, it was supported by Members of Parliament from across all of the Benches. The thinking at the time-and this is why I and, I think, the union feel so strongly about this-was to encourage support for the wages councils, particularly the agricultural wages council, and the reasons behind that have not changed. The thinking was that there are certain areas of industry where it is enormously difficult to organise the workforce or protect it in a day-to-day way.

As noble Lords will know, aside from the agricultural wages boards, all other agricultural wages councils were abolished back in the 1980s. The agricultural wages council itself was retained because there was continuing recognition that this is a very difficult area in which to organise the workforce, and also because particular aspects of it need to be protected. The most particular aspect is that in many circumstances the relationship between the worker and the employer is very personal. The relationship often involves just one or two employees and one employer. It is a very close relationship where day-to-day friendship and trust has to be established. How, in those circumstances, can the employee raise for himself or herself the sorts of questions that need to be answered if that employee is to feel secure in his or her employment and endeavour to improve his or her circumstances?

The noble Lord, Lord Greaves, has already talked about the various grades available to agricultural workers. Moving along those grades depends on having had access to certain kinds of upskilling and training. How can a worker-knowing, quite often, that circumstances may be quite tricky on the farm; that they may be struggling in economic terms, or in terms of access to manpower-raise his or her own concerns and promote his or her own interests? It is very difficult.

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That is precisely why the agricultural wages board was retained when the other wages councils were abolished. I can see no reason why we should look at this now and say that things are any different.

I accept that life moves on, that nothing should be set in stone, that we have to look at arrangements that have been with us for many years and consider whether those arrangements are still appropriate. But nothing has changed in the day-to-day experience of those workers that would allow us to say that their protections should be lessened, loosened or removed in any way. The national minimum wage does not compensate and would not cover the circumstance which the agricultural wages council rules cover in terms of protecting that workforce.

With those few words, I support entirely the amendment put forward by the noble Lord, Lord Greaves.

The Duke of Montrose: My Lords, may I add a few words as an agricultural employer with a couple of agricultural workers? I must say that the two workers I employ are never loath to come and argue with me about what their wages should be. On the question of the agricultural wages board and the rate set, I am speaking, of course-it may be a difficult adjustment-of the Scottish Agricultural Wages Board and Scottish agricultural wages rates, with which I am familiar. I think one can almost say that practically no workers are paid the minimum that is laid down. It is used as a guide on which increments are added. That is true for full-time workers.

One area where the wages board is useful in our area is in dealing with younger workers, although, of course, everything is now tied back to the minimum wage. The minimum wage can serve as a guideline on what increases are useful or necessary in any given year. The other area-I do not know whether it exists so much in the English agricultural wages board-are the wonders, some of which no longer exist, which were called perks. What was the value of perks such as milk and potatoes? A wonder that still exists up in the north is that the provision of a house with hot and cold running water allows a deduction of £1 a week from the agricultural minimum wage.

Will my noble friend the Minister say whether these areas might need some guidance or a body to direct them? The final one, which is of interest in my area, is a shepherd's provision of dogs, which has a special rate for it.

6 pm

Lord Whitty: My Lords, I support the noble Lord, Lord Greaves, in his argument and agree with pretty much everything that he said. I caution the coalition Ministers that they will frequently find that propositions that have been put to successive Governments and their Ministers get dusted off and re-presented to new Ministers. Sometimes-I do not wish to impugn the noble Lord-Ministers are credulous enough to accept them, even though their predecessors have rightly looked at and rejected them. To my knowledge, the proposition of abolishing the agricultural wages board has continued for the past 40 years. It has come less from officials in MAFF or Defra than from pressure

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from the dead hand of the Treasury and the free labour marketeers in what is now BIS. That pressure is evident here. Certainly that pressure was put on Mrs Thatcher's Ministers, who rightly resisted it. It was put on John Major's Ministers, who also rightly resisted it. To my certain knowledge, every Secretary of State and junior Minister for Agriculture in the previous Administration was under such pressure and we rightly rejected it.

The noble Lord will say that things have changed. He has some justification because two things have changed slightly. First, for most of that period most farmers were in favour of maintaining the wages board. That is no longer entirely true. The upper echelons of the NFU have started voting with the workers rather than the farmers, who have taken a rather more jaundiced view of the wages board, even though it has meant a fairly balanced result for both sides in the long run. Many others, who are not necessarily in the top echelons of the NFU, are still favourably inclined towards the wages board because it saves small farmers a lot of work in trying to establish the appropriate rate for a skill and all the other terms and conditions. They would otherwise have to go through all that themselves. Indeed, some farmers' organisations are still in favour of the wages board. The Famers' Union of Wales, for example, is in favour of retaining it and opposes this proposition, as do the Welsh Government. We are talking about a body that covers England and Wales; there are devolution issues here. As far as I am aware, the proposition in Scotland is entirely separate. The noble Duke, the Duke of Montrose, who I am sure is one of the more benevolent employers north of the border, will find that there are Scottish farmers who still wish to retain the process. It is not true to say that all farmers, as employers, are now opposed to the continuation of the board.

Secondly, although we now have the national minimum wage, it deals only with the absolute minimum, as my noble friend Lady Prosser pointed out. There are differences of only a few pence in that area. The whole structure of skill rates and different time rates and the whole issue of non-wage benefits, which were dealt with by the wages board, are not dealt with by having a minimum wage. The whole grading structure is in peril if this board is abolished.

As the noble Lord, Lord Greaves, said, that is not to argue that the present structure could not be hugely simplified. Indeed, the previous Government looked at bringing forward a legislative reform order that would have reduced the number of committees, simplified the process and, to some degree, made the process for the agricultural minimum wage equivalent to that for the minimum wage. That was a sensible proposal, which would have had to follow the procedure of the Regulatory Reform Act. At the time, some noble Lords were concerned that the Act was moving towards the Henry VIII end of the spectrum. However, compared to this Bill, it was an absolute doddle for those who wished to preserve parliamentary privilege. It is probably more like a Henry III Bill in that Henry III had to compromise with Parliament. I believe that on some of these issues the Government will have to compromise

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with Parliament. The process that is being proposed in the Bill, as I have said several times, needs to be addressed.

The agricultural labour force of more than 150,000 in England and Wales-and others who use the wages board as an analogy to avoid engaging in separate bargaining with their employees or their unions-is still an important feature. I hope that the noble Lord can answer the question asked by the noble Lord, Lord Greaves: what will replace the board? Is there any role for the Low Pay Commission to look at aspects of this-at the particular rates and situations that apply to agriculture? Is there really any prospect of collective bargaining if it is not underwritten by the law? Under the legislative reform order that we contemplated, it would have been possible to have moved the agricultural wages board to a more bilateral structure but still with the legal underwriting. That would probably have been a sensible move. I was certainly in favour of it. We could have moved towards it.

If we leave this entirely to collective bargaining, as applies in other sectors, there is, as my noble friend Lady Prosser indicated, the difficulty of organising in this area. I do not have to declare an interest since I am not a member of Unite, although I have some family connections to it. These days I am a resident of Dorset, which is still a major focus of agricultural workers. There, the union's ability to organise is a little better than it was at the time of the Tolpuddle martyrs, but it is not easy. In so far as the wages and conditions of agricultural workers in Dorset have dramatically improved since those days, they owe a lot to the 100-year operation of the agricultural wages board, rather than the benevolence of employers or the state. It is unlikely that it will be easy to move to a normal situation of collective bargaining in this area.

Perhaps this is not so much a West Country issue. The people who are pressing most for this are horticultural employers, who have a very odd workforce structure. The work is hugely seasonal for obvious reasons. Much of the workforce is made up of migrants, many of whom are very vulnerable. Employers tend to try to pay the minimum rate, if not less. In the horticultural sector, a lot of the seasonal workers, many of whom have skills and qualifications in their own countries, will be pushed down to the minimum rate. The only legally binding rate will be the minimum wage. That, I can see, is desirable for the more ruthless employers in the horticultural sector. However, it is not the equivalent of a situation where you are a permanent employee in a major area of agriculture.

The other question is: who will now enforce the minimum wage in agriculture? It is difficult if we are talking about farms with two or three workers or farms where there are many seasonal workers who move on after a couple of weeks. The agricultural wages board had a rather minimal inspectorate attached to it, but who will now do its work? The Revenue imposes and enforces the minimum wage, but it is unlikely to tramp up and down every farm to find out how much every worker is paid. Enforcement is also an issue.

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